$8,000 Tax Credit Can Be Used for Down Payment

I won't make a habit of copying news into my post, but I felt the news that first time home buyers (someone who has not owned a home for three years or more) can now use the $8,000 tax credit towards the down payment of their home purchase is too important and wanted to share with my readers the exact language.

I hope many of my readers, their family and/or friends will be able to take advantage of this very nice incentive!

Daily Real Estate News May 12, 2009 Share
Tax Credit Can Be Used for Down Payment

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.

Previously, most buyers wouldn't receive the funds until after they filed their tax return, and that deterred some people from using the credit.

The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change. “We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says. His remarks came in an address to several thousand REALTORS® gathered Tuesday morning at "The Real Estate Summit: Advancing the U.S. Economy," at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C..

He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

Source: NAR