First Time Home Buyer Tax Credit Update – FHA Approves Use as a Down Payment

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development announced Tuesday May 12th, that the FHA is going to permit its lenders to allow home buyers to use the $8,000 first time home buyers tax credit as a down payment.  I know a lot of states had already figured out a loan system to allow this “advance” but for those that hadn’t this seems like an even greater opportunity for first time home buyers using an FHA loan.  The issues that I had heard from some people was that you have to have 3.5% down for the FHA loans, so this will definitely  loosen that restriction.  Shaun Donovan stated that the FHA approved lenders will be allowed to “monetize” the tax credit through short-term bridge loans.  The eligible first time home buyers will be able to access the funds immediately at the closing table.  If you are an eligible first time home buyer working with an FHA loan, there is great incentive to buy sooner rather than later.  Remember, the $8,000 first time home buyer tax credit is good now until before December1, 2009.

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May 13, 2009 · Filed Under First time home buyers, Real Estate Edu

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