This afternoon in Washington, DC, Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, stated 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. This is great news!
As I mentioned earlier, previously, most buyers would not receive the tax credit until after they filed their tax return after 12/31/09. For many buyers this was a determent since they need those funds now to close on the purchase of their home. The NATIONAL ASSOCIATION OF REALTORS® has been calling for a change in policy and today was successful!
“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 at "The Real Estate Summit: Advancing the U.S. Economy," in Washington, D.C..
He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term low-interest rate bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table. The funds will need to be repaid when received from tax return filings in 2010.