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FHA Will Allow $8000 Homebuyer Tax Credit to be Taken at Closing as Down Payment

FHA to Allow $8000 Tax Credit at closingTuesday 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ADDITIONAL NOTE: 5-7-09 5pm:  It appears that HUD has pulled/rescinded their Mortgagee Letter 2009-15 which allowed this credit to be taken as a bridge loan until further review.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.

Comment balloon 3 commentsAnn Dail • May 14 2009 11:24AM

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Hi Ann.  I have buyers waiting for this to be worked out.  HUD rescinded it?  Really?  Any new news?

Posted by Debra Kukulski, Broker Associate, SRES;SFR,CDPE;GRI;ABR;e-PRO Realtor, Northern IL (RE/MAX Suburban) over 10 years ago

Hey Ann...I heard this now, too, what a huge disappointment!  First time buyers could really use this kind of assistance to help them take advantage of the great home buying opp[opportunities in this market, and the market could definitely use more buyers as well!

Posted by Debra Kukulski, Broker Associate, SRES;SFR,CDPE;GRI;ABR;e-PRO Realtor, Northern IL (RE/MAX Suburban) over 10 years ago

Debra, Yesterday they finally worked out some of the details and did a new release yesterdayhttp://is.gd/JXyy .  it still cannot be given by bank or seller for 3.5% down payment.  it can be a 2nd lien & used at close for closing costs, prepaids, etc. + there's govt. control on amt. of fees.

Posted by Ann Dail, Broker/Realtor,CRS, ePRO, SRS, B.A.Chem (Baton Rouge Area Homes, Louisiana, USA, 225-761-0551) over 10 years ago

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