Tax Credit Can Be Used on Closing Costs

August 6th, 2009 Categories: Credit & Financing, First Time Home Buyers

Attention: First Time Homebuyers

Recently, FHA-approved lenders received the go-ahead to develop bridge-loan products that enable first-time buyers to use the benefits of the federal tax credit upfront, according to eagerly awaited guidance from the U.S. Department of Housing and Urban Development (HUD) on so-called home buyer tax credit loans that was released today.

Under the guidance, FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent.The FHA bridge loans can’t be used to cover the minimum 3.5 percent down payment we learned from HUD officials.

So, buyers applying for FHA-backed financing with an FHA-approved lender that offers a bridge-loan program can get a bridge loan to bring down the upfront costs of buying a home significantly but would still have to come up with the minimum 3.5 percent down payment.

There remain many sources of assistance for buyers needing help with the 3.5 percent down payment, including many state and local government instrumentalities and nonprofit lenders.

The first-time homebuyer tax credit was enacted last year–and improved upon earlier this year–to help encourage households to enter the housing market while interest rates are low and affordability is high. The credit is worth up to $8,000 and is available to households that haven’t owned a home in at least three years. The credit does not have to be repaid, and is fully reimbursable, so households can get their credit returned to them in the form of a payment.

Learn more about the credit, including how to apply for it this year even if you’ve already filed your taxes, call or e-mail Rick Frissell at 813-653-1241 or Rick@DiamondDwellings.Com

Diamond Dwellings Realty- Florida

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This entry was posted on Thursday, August 6th, 2009 at 6:06 am and is filed under Credit & Financing, First Time Home Buyers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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