As we enter the summer, many questions still remain regarding the $8000 tax credit for first time home buyers. While many queries have been left unanswered, there are a few things that have been made a bit more clear.
1. If there is going to be the ability to use the $8000 tax credit at the closing table, it is going to have be an FHA insured loan. So, no matter what The U.S. Department of Housing and Urban Development(HUD) decides in the upcoming days, if the tax credit is allowed to be used at closing, it will apply only to loans insured by the Federal Housing Administration(FHA).
2. There are two chances that the $8000 will be able to cover the minimum 3.5% down payment that FHA requires. Slim and none.
3. If FHA-approved lenders decide to allow the tax credit to be used for closing costs, lenders will be charging a fee to advance the borrower the money and will be expecting the money to be repaid shortly after the borrower’s tax refund is received.
4. There is a good chance that this will be done on a state by state basis.
5. If the tax credit funds are made available, they will be allowed only for closing costs or a down payment exceeding the 3.5% minimum.
While potential first time home buyers eagerly await programs that will help them take advantage of the current housing market, the government and investors continue to try to reach agreements on how to make the tax credit more helpful for those who fit the first time home buyer profile. Stay tuned to whatisFHA.com for your $8000 tax credit information.
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