The FHA is allowing it and so can you. Savvy Sellers can Allow Buyers to use the $8000 First Time Homebuyers Credit Upfront.
Here is one example:
Tenants bought for the price of renting - with no down payment.
Last November, Glenn bought a bank owned condo for $40,000 cash. He then rented the condo to Sam and Donna for $800 per month. Sam and Donna would love to buy - but they don't have money for a down payment and it is hard to get a mortgage on condos. Glenn would consider selling the condo with owner financing - but he wants at least 10% down payment.
Sam and Donna meet the requirements for the First Time Homebuyers Credit. Glenn SOLD them the condo (using a contract for deed) for it's current market value ($80,000) and allowed them to pay the down payment in 30 days (when they get thier refund check). Glenn seller financed the purchase with payments equal to Sam and Donna were paying in rent. The buyers and seller did most of the paper work themselves and the only additional expenses were the attorney (both had an attorney review the contract for deed) and the doc stamps/recording fees.
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