What a roller coaster ride this has been. Hopes rise and are dashed, maybe, leaving a trail of questions in everyone's mind.
Below is a quote from the Washington Housing Finance Commission website. Posted on 06/11/2009.And it is terminal, as regards a cash advance from the State and possibly any third party who may have been putting together programs to advance the tax credit to the first time home buyer (I did come across one entrepreneur who had devised such a plan).
The latest status report on the $8,000 looks like this, today. FHA still requires 3.5% down payment. If you can get an advance it cannot be used to defray the need for 3.5% down. It can of course be used as an additional down payment or to pay closing costs (possibly even to buy down your interest rate). Freddie and Fannie will undoubtedly follow FHA's position.
Just an opinion..... I can certainly understand the issues of many people about requiring a minimum down payment and not using the $8,000 as an advance applicable to the required down payment. Don't want to step into that NO MONEY DOWN pile again. The real problem would seem, to me, how do we solve the housing crisis. How long does it take most of Seattle's first time home buyers to save the 3.5% for a down payment? It takes me some time, how about you?
Minimum down payments can be factored into the qualification criteria and mortgage interest rate. There are ways to account for the risk involved with a minimum down payment and delinquency rates.
While DC fiddles, the country burns. Have you seen what is happening to interest rates lately? Up significantly. This means an additional hardship on Seattle's first time home buyers and buyers in general. So you have down payment issues slowing the market and affordability (which is actually at a all time low, I hear, Seattle Housing affordability, $8,000 first time homebuyer tax credit, low interest rates- The perfect storm? coming together in an untimely scenario.
In my mind, it seems an odd way to solve the biggest crisis we have ever seen.
"Information regarding the $8,000 First-Time Homebuyer Tax Credit
Thank you for visiting the WSHFC website for information regarding the $8,000 First-Time Homebuyer Tax Credit.
The Commission previously noted it was involved in discussions with the IRS and other interested parties concerning the development of a Tax Credit bridge loan program.
To guarantee repayment of a Tax Credit bridge loan the Commission requested the IRS approve an advance assignment of the tax credit refund. If approved, the homebuyers $8,000 tax credit refund would be directly deposited into a state-owned account or mailed directly to the loan servicer for immediate payoff of the Tax Credit bridge loan.
On June 2, 2009 the IRS formally declined this request citing long-standing regulations that require refunds be paid only to the person or persons filing the tax return. Due to financial risks associated with the Tax Credit bridge loan program and because the Commission already offers numerous down payment assistance programs, the Commission has discontinued the development of an additional Tax Credit Bridge Loan program.
The Commission offers statewide down payment assistance programs for first-time homebuyers needing assistance with a down payment and/or closing costs. For information about House Key Plus down payment assistance (up to $10,000 in assistance) and the Commission’s other programs, please visit the Commission’s down payment assistance page or contact a Commission-trained loan officer to ask about getting pre-approved for the House Key First mortgage loan with down payment assistance."
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