More About the $8,000 Tax Credit for First-Time HomeBuyers
Last month, the government announced that it would allow the first-time homebuyers to use the tax credit towards the down payment of purchasing a home, than the next day they took it away and now it’s back!
For those first-time home buyers who are qualified for a FHA (Federal Housing Administration) insured loan, HUD has recently announced it will allow the tax credit once again. Although the credit cannot be used towards the minimum down payment of 3.5%, under the new guidelines, homebuyers may apply for it to be used as an additional down payment or towards other closing costs. So, the borrower must still provide the initial 3.5% from acceptable sources. The tax credit can only be monetized by HUD approved state Housing Finance Agencies and non-profits. According to HUD’s news release, “Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their down payments via secondary financing provided by the HFA or non-profit.” This allows the borrower to use the funds immediately towards an additional down payment or towards other closing costs.