I was asked a question today...can a first time home buyer get 100% financing and are the banks even loaning any money? So, the answer was...it depends. With our federal government offering $8000 as a tax credit to a first time home buyer (have not owned a home in the last 3 years), this can be a decent down payment for many. I communicated that if they had not filed their 2008 taxes yet (I haven't and I know I'm not alone...I do that about April 13 every year, it's tradition) they could elect to take the tax credit now as long as they purchased a home by 11.30.09 and they would have their down payment. With the sellers paying the closing costs, this is like 100% financing. The other option was to consider homes in a rural setting. In my area, rural is not far, you can be 15 minutes to the "city" and find yourself a great home that qualifies for the USDA rural development loan program. That is 100% financing and a great program if you qualify. It turns out that they liked what they heard and had not realized that they really could begin the dream of home ownership. So, when it comes to 100% financing...yes and no, it just depends.
In this case these folks have been to a lender and I agree with all the changes that have occured in lending we need to be cautious. For the right indidiual, this can be a great opportunity. I always counsel to request clients speek to their cpa or tax professional to confirm, but this is what I have been told by several professionals in our industry.
Thank you for checking with your people...let me know if this comes up for you with a client and how the process goes. I have a client right now...we are closing next week, so they fall into the "close before the 4-15-09 timeline", they will take this option on their taxes.
You're right...who knows what tax benefit the governement will come up with next, right now, this is what I have been told and I think it's a great option for the qualified buyer.
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