First-time homebuyer tax credit available as down payment

May 12, 2:05 PMResidential Real Estate ExaminerMichele Lerner

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Several thousand Realtors cheered this morning in a ballroom of the Marriott Wardman Hotel in Washington, D.C. when Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said that the Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a ownpaypment.

Donovan’s remarks came in an address to several thousand Realtors® gathered this morning at The Real Estate Summit: Advancing the U.S. Economy, a special daylong session at the Realtors® Midyear Legislative Meetings & Trade Expo here.

Secretary Donovan said that important changes, which the National Association of Realtors® has been calling for, will help consumers purchase a home.

“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 downpayment,” Donovan said.

According to Donovan, the FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.
 

COMING IN SEPTEMBER: "HOMEBUYING: Tough Times, First Time, Any Time" by Michele Lerner