Home Buyer Tax Credit Becomes Down Payment

In an effort to spur the housing market, the United States Department of Housing and Urban Development released plans to implement flexibility to the $8,000 First Time Home Buyer Tax Credit; as part of President Obama’s 2009 stimulus package.

"We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a down payment," United States HUD Secretary, Shaun Donovan stated. May 12th, 2009

FHA will allow approved lenders and nonprofits to issue short-term bridge loans buyers can use for down payments. Buyers would repay the loans after getting their tax refunds in 2010.

“Allowing first time homebuyers to utilize the tax credit as a down payment, plus the availability of low interest rates creates incredible opportunities for those who waited.”

By Tony Marks, Marks & Marks Mortgage.