Can The $8,000 First Time Buyer Tax Credit Be Used as Downpayment?
May 19th, 2009 categories: Aventura, Real Estate News
Under a decision announced last week, the U.S. Department of Housing and Urban Development (HUD) will allow eligible first-time home buyers to use the tax credit authorized under The American Recovery and Reinvestment Act of 2009 during the actual home purchasing process. However this Mortgagee Letter 2009-15 issued on May 11th appears to have been rescinded effective May 13th. So in short, as it stands currently first time home buyers may not use the $8,000 tax credit as part of their down payment.
If mortgagee letter 2009-15 is to be reinstated buyers and real estate professionals need to be aware that loan programs that would accommodate this development will not be available immediately. There are many considerations that need to be addressed such as FHA and Conventional underwriting guidelines, secondary market saleability and pricing issues just to mention a few.
For now the down payment will need to come from the buyers own funds and/or as a gift from a family member when underwriting guidelines permit.
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