Use your $8,000 First time homebuyer tax credit as my downpayment...sort of.

Mortgage and Lending with Choice Finance Corporation


**UPDATE** HUD pulled this letter the day after it was issued. Stay tuned for updates

On Tuesday HUD Secretary Shaun Donovan announced that first time home buyers may use the $8,000 first time home buyer tax credit as part or all of their down payment, when they use an FHA insured loan to purchase! We currently have very few details at this time, We do expect further details to be released next week. What I'm reading now, is that FHA will allow first time home buyers access to the tax credit through short term bridge loans,  I assume these LOANS would come due some time in the middle of 2010 once returns have been filed and refunds have been issued. Keep in mind, this is a loan - this is not a situation where you simply have $8,000 of your cost paid. One more important caveat, just because HUD says they will allow this, it does not mean that all lenders will allow this. Lenders are imposing their own guidelines over and beyond HUD's guidelines. Before we get too excited, we must first see how lenders will react. Even if this is widely accepted by lenders, you must keep in mind that this is a loan. It will be offered by 3rd party approved non-profit and government agencies. You will need to apply, qualify and be approved. Still, this news is very encouraging for borrowers who currently cannot cover the 3.5% down payment requirement or get a gift to cover it.

Should this plan work as intended,  Here is what a purchase could look like on a $230,000 FHA purchase in Maryland:

  • 3.5% down = $8050
  • Estimate closing cost=$5347.66
  • Estimate prepaid taxes & insurance = $1532.65

total cost = $14930.31 

  • MINUS 3% seller closing assistance $6900
  • MINUS $8,000 tax credit

total out of pocket expense to purchase your home = $30.31

The monthly payment on this scenario at a 5% 30 yr fixed rate would be approx. between $1550-$1650 per month. Check rates daily at

I think you may be surprised at the type of property you can own for $230,000. Click here to view local listings from a local company

As you can see, now is the time for first time home buyers! Call me today to find out how much home you can afford!

Josh Burley
Sr. Loan Officer
Choice Finance Corp.
301.881.8900 x125

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