HUD Withdraws Offer/Statement on $8000 Tax Credit

On Tuesday I wrote about an exciting new program that HUD & FHA were rolling out to let the $8000 Tax Credit for First Time Homebuyers be used as a downpayment.

That has now been retracted, and the letter removed from the HUD site.

Yet Yesterday, HUD Secretary Donovan said that many states already were monetizing the tax credit, creating a so-called “Bridge Loan” where the money is loaned up front from the credit due down the line. This is, in essence, what the downpayment “credit” would come from. Here are more details from the National Association of Realtors conference where Donovan spoke.

Jeff Belonger, an FHA specialist ,wrote about it this morning, explaining the legal problems with the plan as proposed.

So not totally gone, but may not be available everywhere. OK, Maryland, are we going to be in? Can we get it done like Washington State has?

$8,000 Tax Credit Can Be Used for Downpayment for Baltimore Homebuyers

**Update May 14, 2009, please see my update that HUD has retracted its statement and that this may NOT be the case everywhere.**

The Secretary of the U.S. Department of Housing and Urban Development announced at the National Association of Realtors summit today that the FHA is going to allow lenders to let First Time Homebuyers use the $8000 tax credit currently in place as a downpayment rather than having to wait until they file their tax returns.

Secretary Donovan stated: “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.”

On the heels of the Fannie Mae & Freddie Mac 105% Refinance Plus Program announced last month, this is a great indication of how the Obama Administration is working hard to stabilize the housing market and the economy in general.

More details will be forthcoming, and until then, the details can be found here.

So, what are you waiting for, Baltimore Homebuyers? THE TIME TO BUY IS NOW! Don’t miss your chance!