Use Your $8K First Time Home Buyer Tax Credit At Closing!

Real Estate Sales Representative with Fieldstone Real Estate

About a week and a half ago, there was a ruling allowing home buyers to use their First Time Home Buyer Credit (a max of $8000) toward closing costs. Today, VHDA (the Virginia Housing Development Authority) rolled out their plans implementing this program, and here are the highlights:

 * The buyer's primary loan must be a VHDA FHA loan. There are income limits associated with obtaining VHDA loans, but the loans are generally below market rate. The income limits are adjusted based on family size, but for a 3 person household, the maximum income is $100,000.

 * VHDA will basically "front" the buyer the tax credit - up to $8000 - to be used toward closing costs. (Note: Buyers must still invest 3.5% of the sales price as a down payment, and the tax credit can NOT be used to cover that minimum investment.)

The "fronting" of this money will be in the form of a second trust (aka a mortgage) which will be interest free for the first 12 months, allowing the buyer plenty of time to file for and receive their tax credit check, which should then be applied to pay off this loan.

* To claim the tax credit, buyers must CLOSE on their home no later than November 30th... so time is wasting! Take advantage of this loan program today. It's a great new option for FHA buyers that qualify for a VHDA mortgage. For more information on this or other loan programs, call or email me. I am not a lender, but have alliances with several different lenders that offer different programs; and happily will refer you to the right loan counselor.


Cindy Fox with SunTrust Mortgage provided this "Breaking News" to me this evening, allowing me to pass it on to you. She's a fabulous loan counselor familiar with all the government loan programs and options available to first time home buyers.


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