The U.S. Department of Housing and Urban Development (HUD), announced May 11, 2009, that the FHA is now going to permit its lenders to utilize this year’s first time home buyers tax credit as down payment and closing cost assistance.
The first time home buyer tax credit was part of the Economic Stimulus legislation that was passed earlier this year by congress and expires 12/01/2009. However up to this point in its application, the funds 10% of the purchase price up to $8000, were not eligible for down payment or closing cost assistance but could only be obtained via refund on your next IRS tax filing.
This move is exciting, as it changes the game for many first time home buyers currently exploring the Huntsville Real Estate Market. The way the program will work is via a ‘bridge loan’ that is used as a tax credit advance, collateralized only by the expected tax credit itself.
If you are a first time home buyer be sure you check with your potential lender to verify availability of this bridge loan if you wish to use your tax credit at closing. More detailed information is provided in this PDF document.
The result of this action may very well establish the strongest first time home buyers market the country has seen in several decades. Nevertheless, remember the tax credit deadline is for closings on or before 12/31/2009 and also don’t forget it’s only a buyer’s market if you actually buy.
Story Update – HUD retracts Down-Payment Announcement
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