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Feds reverse rule to assist first-time home buyers - Tax credit ineligible for down payment

By
Managing Real Estate Broker with First Choice Reatly, LLC 20017

Federal officials on Monday May 18, 2009 reversed an earlier decision to allow first-time home buyers to use an $8,000 tax credit to borrow the down payment on a home.

A week earlier, U.S. Department of Housing and Urban Development Secretary Shaun Donovan had told the National Association of Home Builders that HUD would let banks and local governments offer short-term "bridge loans" to cover the down payment for first-time buyers eligible for the tax credit. The loans would have been available to applicants for federally insured mortgages such as Federal Housing Administration loans.Lenders, home builders and real- estate agents had reacted favorably to the bridge-loan proposal, saying it would open up the housing market to more first-time buyers. The loans also could have created income-tax issues, according to the IRS officials who shot down HUD's plan.

If you do buy a home this year by Nov, 30 2009 you will be eligible up to $8,000.00 tax credit.  Please go to the following link to see all the eligibility requirements.

http://www.irs.gov/newsroom/article/0,,id=206293,00.html