For those that qualify (there are certain criteria to be met including income limits) for the First Time Home Buyer $8,000.00 Tax Credit, a plot is finally evolving to let them use the credit where they need it most – for a down payment. Although not all the details are worked out, such as how the “bridge loan” for the tax credit will be funded, the basic premise is there and promises to widen the availability of credit to the prospective homebuyers we all so terribly need.
FHA Plans to Offer $8,000 Upfront to First-Time Buyers
by: Nick Timiraos
One of the problems during the housing boom was that many people were able to buy a home with small or no money down, giving them small financial incentive to work hard to hold on when times got rough.
Now U.S. housing officials are working on a plot that would essentially allow some first-time buyers to buy homes by paying small money upfront. Rather, they would be able to place an $8,000 income tax credit for first-time buyers towards their down payment on loans backed by the Federal Housing Administration. The thought is to allow home buyers to “monetize” the tax credit. Right now, home buyers must wait until they file their taxes to receive the credit.
The FHA is finalizing a program that would allow approved lenders, non-profits, and state and local governments to fund small-term loans that could be used as down payments to be repaid once the borrower received the tax credit. Once they received their tax credit, they would pay off the small-term loan and place equity into their home.