$8,000 First Time Homebuyer Tax Credit - Approved by FHA/HUD 5-29-09 - But buyer BEWARE !!!

Reblogger Maureen McCabe
Real Estate Agent with HER Realtors

 

Believe me if I knew of a local lender who was telling the story to buyers I'd be linking to them or Re-Blogging their content. 

I got back from an appointment to see this on ActiveRain. 

Nothing in my mailbox from local lenders but maybe they are spreading the word to buyers directly. 

This is from Jeff Belonger a lender in New Jersey.  

Buyer Beware you can NOT use the tax credit for downpayment.  Read Jeff's post:

EDIT Comments have been disabled by the author

comment on Jeff's blog!

Original content by Jeff Belonger

Tax credit for first time homebuyers

 

 

BUYER BEWARE of Tax Credit

 

The first time homebuyers tax credit of $8,000 has been approved by HUD for all FHA loans. But don't get too excited too quickly. If you get a chance to read the mortgagee letter, ML 2009-15, it states that you can't use this tax credit for the required down payment of 3.5%.

HUD originally put out mortgagee letter 2009-15 on May 12th, but was rescinded the next day. Please read about that here : $8,000 tax credit rescinded by HUD. For some reason, it was prematurely placed on HUD's web site, but apparently wasn't finalized. Now we have a new version and if not read correctly, you could be putting misinformation out there. So what does the new mortgagee letter state?

 

 

 

Here is the positive part about the tax credit. You can receive the first time homebuyers tax credit upfront, but not through the IRS.  This would be illegal. Please read : It's illegal to receive your tax credit before you close on your homeBuyers - BEWARE, please read that, because too many people are saying that you can get the money directly from the IRS prior to closing. The IRS & HUD both say no!!!

So how can you receive this upfront?  It can be given to you as a second or a silent second from any Federal, State, or local agencies, and any FHA mortgagee or any FHA approved non-profit organization.  People, in layman's terms, this is already acceptable by HUD's standards, except for the lender that is now able to give the monies upfront in a form of a 2nd mortgage. Another terminology is that this can be an advance loan from any of the entities mentioned above.

 

 

 

Summary :  Essentially, this means that the entities mentioned above, are purchasing this tax credit on your behalf and giving it back to you. The short version of this is that you can use some of the money from the $8,000 Tax Credit as your down payment, but after you put down the first 3.5% of that down payment. Meaning, you have to come up with 3.5% of your own money still. With FHA loans, it can still be a gift from a relative/family member.  It also can come from non-profit or government agencies to be used as your initial down payment, but not used through the tax credit. Overall, the tax credit that is advanced, can be used for all closing costs. But you can't receive monies back at closing. 

And again, keeping in mind, it's illegal to receive this tax credit upfront directly from the IRS. There is more verbiage in the mortgagee letter 2009-15 , but the main point is that you have to have 3.5% of the downpayment yourself, before you can use the tax credit that would be 'loaned' to you.

 

 

THOUGHTS??? - Well, in all honesty, how does this truly help? What is the gov't thinking here? As a buyer, I would still need the initial 3.5% of my monies for the down payment. Again, needing money to buy. I know some of you are for this fact, that buyers should have skin in the game. But keep in mind, this was not the true demise to our foreclosure mess. We need to sell houses to keep this economy going.  Just my opinions and food for thought.  thanks

 

 

My Series on the First time homebuyers $8,000 tax credit - Everything you need to now, from start to finish - What's allowed and what's not allowed :

 

 

 

follow Jeff Belonger on Twitter

 

 

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages - 

- Conventional Loans - 203 k loans -

- Mortgages -

 

Experience & Knowledge at its BEST !!!

 

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2009 by Jeff Belonger

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Home Buying
Location:
Ohio
Tags:
first time buyer tax credit

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Ambassador
749,413
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Maureen....thank you very much for reblogging this, for spreading the word, and for the polite introduction.

May 29, 2009 08:51 AM #1
Rainmaker
1,476,478
Maureen McCabe
HER Realtors - Columbus, OH
Columbus Ohio Real Estate

Hey you are da man.... I was just reading a May 29, 2009  Washington Post housing  column that says buyers can use it for downpayment.

May 29, 2009 08:57 AM #2
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
1,476,478

Maureen McCabe

Columbus Ohio Real Estate
Ask me a question
*
*
*
*
Spam prevention

Additional Information