Using the $8,000 First Time Homebuyers Tax Credit as a Down Payment. – NOT So FAST!
Posted by yourmortgageplanner on Jun 2, 2009 in FHA, Financial Awareness, FTHB, Random/Old BlOgS | 5 comments
I am sure you have heard all the Hype about the new ability about Using the $8,000 First Time Homebuyers Tax Credit as a Down Payment. Not so FAST! As a lender on the Broker side I am all over this; I have queried multiple lenders and have included there response. In short not one lender has implemented it and feel it will only be available towards the Closing Cost not the 3.5% required down payment.
Most borrowers will still have to come up with the FHA’s required 3.5 percent down payment, unless they work through a state or local housing agency or an approved nonprofit. Ten states have such programs in place, according to the National Council of State Housing Agencies. – AP: By ALAN ZIBEL
At this time Eagle has no investors who will take this. David feels that we need more time for the program to “evolve” as no one know who will monetize these funds. Borrowers can not yet use this as down payment, they still need the 3.5% down, it may let sellers off the hook for closing costs, but at this point no one knows.When this is available to us, we certainly will let the world know, that includes YOU! – Eagle Funding.
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[...] News Sources wrote an interesting post today onHere’s a quick excerptI am sure you have heard all the Hype about the new ability about Using the $8,000 First Time Homebuyers Tax Credit as a Down Payment. Not so FAST! As a lender on the Broker side I am all over this; I have queried multiple lenders and have included there response. In short not one lender has implemented it and feel it will only be available towards the Closing Cost not the 3.5% required down payment. Most borrowers will still have to come up with the FHA’s required 3.5 percent down payment, [...]
William, thanks for a well written blog post about this homebuyer tax credit update and the fact according to the HUD’s Mortgagee Letter that basically any advance/loan against the $8000 Tax Credit CANNOT BE USED for the 3.5% down payment.
I understand many states offer a way to get a mini loan through grants / 2nd lien loans, paid back via the $8000 tax credit, but haven’t really heard much of its’ usage.
Many people are touting that the FHA has said they will allow usage of the Tax Credit towards the down payment, but as of now, according to the letter you quoted yourself from HUD, THE TAX CREDIT CAN’T BE USED IN LIEU OF BORROWER’S OWN 3.5% funds need for down payment.
Thank you for setting the record straight William.
All the best to you.
Fellow mortgage pro, Ed Bisquera
Follow me on Twitter @edbisqeura
[...] those of us primarily working with FHA First-Time Home Buyers, we’re also keeping tabs on the $8000 Tax Credit being used as a down payment, as well as how long the Fed plans on purchasing Mortgage Backed [...]
[...] those of us primarily working with FHA First-Time Home Buyers, we’re also keeping tabs on the $8000 Tax Credit being used as a down payment, as well as how long the Fed plans on purchasing Mortgage Backed [...]
Hi,
Just found your blog on Technorati & Digg upcomming news feeds and read a few of your other posts.
ISeems good contents,Keep up the good work. Look forward to reading more from you in the future.
Thanks,
Michael
Can you use the $8,000 tax refund as reserves? You can’t use a future tax refund as reserves but can you use this
tax refund as reserves since you are going to get it. if your tax return is already filed and you amend your return after you close- and you show the underwriter your future amended return- can you use the $8K as reserves for your loan
i am not a fan of having credits and getting credits cards.**’
i had a bad credit score last year but i was able to fix it now.’~”