Tax Credit Can Be Used for Down Payment

GOOD NEWS FOR POTENTIAL HOME BUYERS.

Tax Credit ($8,000) Can Be Used for Down Payment

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday (5/13/09) said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.

Previously, most buyers wouldn't receive the funds until after they filed their tax return, and that deterred some people from using the credit.

He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

Donovan went on to say that the Obama administration plans to further stabilize the housing market.

“I do think we have some early signs that the market overall is stabilizing,” Donovan says.

“Since January we’ve seen both home sales moving up and down around a relatively stable number and we are seeing the first signs that the rapid decline in home prices is starting to abate.”

ACT NOW, this $8,000 tax credit ends on 12/1/09.