HUD Approves First Time Homebuyers, Lenders Using Tax Credit as Down Payment
May 30, 2009 by Danilo Bogdanovic
Filed under Buyer Resources, Mortgage/Lending
Looks like I spoke too soon… HUD has approved first time home buyers and lenders (mortgagees) using the up-to-$8000 first time home buyer tax credit as a down payment, to pay closing costs and/or buy down the interest rate. The official HUD letter with guidelines was released yesterday. Here it is (if you can’t see the document, click here)…
HUD Letter to Mortgagees: Instructions on how to use First Time Home Buyer Tax Credit -
The next step is for banks/lenders to come up with a system internally that will allow them to offer this to borrowers. This could take a few days to a several weeks. Check with your lender to see if/when they have a system in place for you to take advantage of this program.
P.S. This “use your tax credit as a down payment” program is set to expire this November. The up-to-$8000 first time home buyer tax credit as a whole is set to expire December 1, 2009.
Hat tip to Dulles Association of Realtors (DAAR) for breaking the story.
Doug Francis on Wed, 17th Jun 2009 9:03 am
Just to clarify this a bit, buyers using FHA loans still need to have the 3.5% down payment. The tax credit can be used to pay closing costs or used as additional down payment beyond the 3.5% required in the HUD memo.
Really on Wed, 11th Nov 2009 11:34 am
If i still need 3.5% down,Then how can this $8,000 also be used as a down payment ? If i have 3.5% down and need let say $3,000 in other fees, Do i get my balance ?
Danilo Bogdanovic on Wed, 11th Nov 2009 12:33 pm
The way it works is that you may be able to apply the amount of tax credit you qualify for to your down payment when buying a home. You’ll need to check with your lender on how to apply the tax credit to your down payment. If you do not apply the entire amount of your tax credit to your down payment, the rest could be applied to any taxes your owe and/or a rebate. DISCLAIMER: I am not an accountant so please check with an accountant and/or the IRS for guidance on this topic.
judy kreger on Sun, 21st Feb 2010 6:22 pm
I am legally blind and live on disability/ my father will help with some of down payment but i am first time buyer and could use money from first time buyer. i have waited my whole life to own my own home and hope god will help me at my 577 years of age. i have good credit and this place is on next stree,so like rthe condo i am renting i have memorized floor plan because of my blindnedd,my age is 56 and i have good credit. please help me get this, judy kreger 5867131501
judy kreger on Sun, 21st Feb 2010 6:24 pm
i have hoped for a home my whole life but before my husband died i lost everything and have saved for a home for last nine years
Danilo Bogdanovic on Mon, 22nd Feb 2010 12:27 pm
Judy,
I am a REALTOR and not a loan officer or mortgage broker so I can not directly help you with financing. Only a loan officer can help you directly. You should speak with one in your area. They will be able to help you determine what types of financing you qualify for and which of those works best for you. I may be able to find you a good loan officer in your area if you let me know what city/state you’re in.