Use Your Tax Credit Immediately

This last May Shaun Donovan of the Federal Housing Administration (FHA) announced that first time homebuyers applying for the new $8,000 tax credit can use the credit towards the purchase costs of an FHA-insured home. Borrowers applying for an FHA-insured mortgage are required to make a 3.5% down payment. Lenders were not allowed to monetize the tax credit to meet this down payment. Department of Housing and Urban Development (HUD) authored a news release regarding this new rule. According to the HUD, and to me, this is a win win situation for everyone. Families who otherwise could not afford a house are being provided a new opportunity and at the same time they are helping the recovery of the housing market. As I said in an earlier post about this tax credit it’s basically free money waiting for the taking, all you have to do is be a first time homebuyer and you get the credit. With the new FHA rule you can use this tax credit immediately. For more information on this visit the HUD’s website and more importantly their news release on this new tax credit policy.