I am sure everyone heard about another change to the $8000 tax credit policy. On Friday, HUD Secretary Shaun Donovan announced a policy change that would provide buyers with quicker access to the tax credit. The credit will be issued in advance in the form of a short term loan to the buyer. The buyer will have to be pay the loan back when the buyer receives their tax credit. This new policy only applies to FHA loans.
Here’s the kicker: The short term loan CANNOT GO TOWARDS THE 3.5% DOWN PAYMENT!!! The Government still wants the buyer to “have some skin in the game”.
In my opinion, buyers should opt to have the closing costs paid by the seller, just like 90% of the transactions out there, and keep the $8000 for themselves when they file their taxes.Here is the letter from HUD to approved mortgage lenders, of which, we at Atlantic Home Equity, are. 09-ml-1520using20first-time20homebuyer20tax20credits1
So, what does this mean for the Towson First Time Homebuyer? You still need money for a downpayment, and can possibly ask for seller closing cost help.
The details coming from HUD & FHA have been very confusing, as I have written about before.
If you would like further information, please don’t hesitate to contact either Tasha or myself. We understand the ins & outs of the homebuying process, and can help walk you through the steps!