Ok so the title of this blog sounds like a used car commercial, but this is a legitimate offer. If you qualify for the first-time buyer tax credit and you are using FHA to purchase a home this year you will soon be able to use the tax credit as the down payment on your home. Previously buyers would have to wait until tax season next year to receive this money.
Last week the Dept. of Housing and Urban Development announced that it will soon allow first-time buyers using FHA to access the $8000 tax credit for a down payment. This is good news for people who want to take advantage of the low interest rates and low prices, but do not have the necessary down payment or do not want to deplete their savings.
FHA loans require only 3.5% down payment as compared to 10-20% for most conventional loans. However, for first-time buyers who are just beginning to earn equity and build personal assets, 3.5% is still a lot to pay upfront.
Basically, the FHA lender 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. More good news for first-time buyers and more details to come!