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More information about Tax Credit for Down Payment program

by Mark Rieger, Duke Warner Realty

First Time Homebuyer Credit

HUD has just announced that detailed guidelines on the federal government's plan to provide short-term loans to borrowers using the First Time Homebuyer Tax Credit is expected to be out shortly but a spokesperson from the U.S. Department of Housing and Urban Development, which is writing the guidance, couldn't give a firm release date.

The short-term loan program, which would effectively monetize the first-time homebuyer tax credit by permitting eligible lenders to make bridge loans collateralized by the borrower's expected tax credit, was announced by HUD Secretary Shaun Donovan at the Real Estate Summit the National Association of Realtors® hosted on May 12 during its 2009 Midyear Legislative Meetings in Washington.

It's unclear at this point what shape the guidance will take and whether authorization for the loans will be available across the board or only in states in which the state housing finance agency already has a tax credit bridge-loan program in place.

I will keep you informed regarding the release date of the guidelines as they become available. Call me if you have any questions.

$8,000 Tax Credit as a Downpayment?

by Mark Rieger, Duke Warner Realty

Coming Soon: $8,000 tax credit to be used for down payment at closing!

On Tuesday (May 12, 2009), the Federal Housing Administration (FHA) announced it will allow first-time homebuyers to use the federal tax credit of up to $8,000 for a down payment at closing – for FHA loans.    FHA will allow approved lenders and nonprofits, and state and local government agencies to issue short-term bridge loans buyers can use for down payments.  Buyers would repay the loans after getting their tax refunds.  This could be good news for first time home buyers, which are slated to account for 53% of home purchases in 2009 - but unfortunately, there isn't much we can do until the details of the program are fully released, and in turn accepted by lenders.   I’ll keep you posted!

Remember: FHA already allows the buyer to receive a gift for the down payment (minimum 3.5% down).  Many buyer’s are already taking advantage of this unique feature of FHA by getting a $8,000 gift with plans to repay the gift after closing and after they get the $8,000 tax credit (note: even though gifts don’t need to be repaid – a homeowner can always decide to repay the gift if they wish).

As always, if you have any questions, please don't hesitate to call. If you know of anyone looking to Buy or Sell Real Estate in Central Oregon, I would greatly appreciate your referral. Thanks.

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