Information was recently released about first time home buyers being permitted to use their tax credit as a a down payment.Â I had a recent discussion with a loan officer in our office.Â He discussed with me that in order for this to happen, HUD would need to approve the use of short-term bridge loans.Â Â This has not happened yet.
If a loan is approved for the buyer, the buyer wouldÂ need to repay the Â loan when he received the funds from the tax return.Â Â One item that may be an issue is if the buyer owes money, then the full $8,000 would not be refunded to repay the loan.
The loan officer in my office, said he is seeing a lot of buyers receiving gift money with intention to repay the source after their return comes in.
Check with your loan officer for further details.
Quoted from Realtor Magazine
“Under the guidance that’s under development, state agencies and other HUD-approved entities would be able to provide short-term bridge loans that households could use to help with their down payment. The loans would be repaid with the proceeds from the households’ federal tax credit.
The loans were announced on the opening day of NAR’s 2009 Midyear Legislative Meetings in Washington, D.C., last week. In his announcement, HUD Secretary Shaun Donovan said guidance would be issued shortly.
When the guidance is released, it is expected to cover eligible lenders and set parameters for loan terms and repayment. ”
What or Who is HUD?
“Housing and Urban Development, a cabinet of the United States. It has existed since 1965 and is charged with ensuring smooth policy for housing and city development. Since the mid-1970s, its focus has shifted primarily to housing, leaving urban planning more in the hands of individual cities.
One of the main functions of HUD, and certainly that with which most people interact, is its role as a lending facilitator. HUD helps people of low- and mid-level incomes acquire loans to purchase housing. HUD itself is not a lending institution, but it approves lenders and supports them materially.”Â Â Â Read More
First-Time Homebuyer Federal Tax Credit Info
First-Time Homebuyer Tax Credit Details
Great News! Tax Credit Can Be Used for Down Payment