Federal Tax Credit Can (or is it can't) be used as a Down Payment?
Posted May 19, 2009 @ 9:17 pm, Viewed by 453 Visitors, Read 461 Times.Maybe you saw the new, read a blog, heard people talking about it.
On May 12, 2009 the following Press Release was issued:
Improvement Coming to Buyer Tax Credit?
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said that the Federal Housing Administration is working on a plan that will 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. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.
“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says. His remarks came in an address to several thousand REALTORS® gathered May 12 at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C..
He says FHA’s approved lenders would 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. The plan isn't final; more details are expected in coming weeks.
And just a few days later word spread that the program was pulled. Not an official press release mind you, just rumor.
Not since the initial bail out funds were released without any oversight have we seen the Feds move so quickly on something. Unfortunately for Buyers, they moved in the wrong direction. Now I was not thrilled with this to begin with. After all, we are still reeling from the effects of 100% financing, we did not need this to start it all over again, but that said, A press release WAS issued. So then, why was a press release not issued along the same channels about the halt to the program?
No one will know for sure, but relax, if you though it was real, it was...for a day at least.
Larry Jensen, NY RE Broker
St. Lawrence Properties, LLC
www.SLP247.com
Your TOTAL Real Estate Solution
Larry Jensen, Principal Broker
St. Lawrence Properties, LLC
888-SLP-NYCT (888-757-6928)
http://www.SLPNYCT.com
Rate this Post!
Share this Post
Print
Social Bookmarking1 Responses to “Federal Tax Credit Can (or is it can't) be used as a Down Payment?”
REW Blogs User Stats
Currently Online Users:
0
Total Users:
2,389
Entries:
7,605
Unique Views:
6,450,370
Total Views:
6,788,242
Total Comments:
9,372
Total REW Points:
510
I am the Principal Broker at St. Lawrence Properties, LLC. We offer Real Estate and Property Management services throughout Westchester, Putnam and Dutchess County. Read More
Contact Me
RSS Feed- This User's Stats
-
Blog Entries: 12Average Blog Rating: 0Unique Views: 4,913Total Views: 5,060Comments Posted: 3Comments Received: 7REW Points: 0
Top Rated
REW Blogs RSS Feed
As a lender, we were prepared to move forward on Monetizing, but since the initial program was opened up, the fed's backed down. For lenders, unless a short term bridge loan can be guaranteed to be repaid from tax credit directly from IRS we were not really in a strong position to even collect it if borrower decided that "another bill takes priority" and never pays us back. Its still a great credit, and I've closed quite a few loans on the basis that the client will receive funds back in January or February.
Anthony-
Lend America Mortgage
631-944-6910