Tuesday evening Realtors across the country received some exciting news. Shaun Donovan, secretary of the U.S. Department of Housing and Urban development said FHA is going to permit its lenders to allow homeownrs to use the $8000 1st Time Homebuyer Tax Credit at closing for down payment and other costs rather than waiting to receive the credit later after closing. It will take some time for this to be worked into actual practice. Locally here in Baton Rouge as of Thurs. morning, I have not found a lender where this has filtered down, but it should be just a matter of time. Banks must work out terms of that credit. It will be allowed as a bridge loan, so interest rates, lenght of term , creidt scores to qualify, etc. must all be worked out by each FHA lender as to what risk they will accept.
ADDITIONAL NOTE: 5-7-09 5pm: It appears that HUD has pulled/rescinded their Mortgagee Letter 2009-15 which allowed this credit to be taken as a bridge loan until further review. More news as it becomes available.
