Using the $8000 First-Time Homebuyer Tax Credit As a Down Payment
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Great news for first-time home buyers. This week, Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development stated that the Federal Housing Administration (FHA) is now going to permit it's lenders to allow home buyers to use the $8000 tax credit as a down payment. Previously, buyers had to wait to file their taxes to take advantage of the tax credit, which hindered some home buyers from buying.
By allowing buyers to utilize the tax credit as a down payment, money will now be freed up for the buyer that would otherwise be needed at closing. This will allow the first-time home buyer to save their money for a rainy day or for home improvements.
I believe this new program will further stimulate the already improving real estate market, attracting even more first-time home buyers.
There couldn't be any more incentives for first-time home buyers, considering that interest rates are at an all time low, home prices are not over inflated and there are plenty of homes to choose from. Sellers would have to give the home away for free for there to be a better deal. This is the absolute best time to be a first-time home buyer.
Consumer confidence needs a boost and I feel that this is just the news that will do it or at least light a fire. Now, if only the news media such as the TODAY Show would report on this great news instead of always reporting on the negatives about the real estate market, consumer confidence would increase.
If you are a first-time home buyer, get out there and find your home before this tax credit is gone in November.
Rene Porsia is a Realtor. Learn more on her blog.
Editor's note: We have received reader complaints disputing the accuracy of this guest editorial. Be sure to consult a real estate professional before investing.
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Please provide additional information
Everything I've read does not support the information you've posted. All the information from HUD and FHA states the purchaser is entitled to a credit for a PORTION of the sale of the house...if you have additional information from credible sources stating the entire portion of the 8K can be used towards downpayments, please advise.
Using First-Time Homebuyer Tax Credits for the Downpayment
The U.S. Department of Housing and Urban Development released the program May 11, 2009. The program is official and is more of a Tax Credit: Short-Term Loan that can be used as the down payment.
Here are some of the program highlights,
The Tax Credit: Short-Term Loan:
Entities that can offer the tax credit advance with short-term loans:
•Federal, state, and local governmental agencies and nonprofit instrumentalities of government, FHA-approved nonprofits, and FHA-approved mortgagees may provide short-term or “bridge loans” secured only by the anticipated tax credit due the homebuyer as collateral.
How the short-term tax credit advance loan works:
•The amount that may be borrowed in this manner may not exceed the anticipated tax credit due the homebuyer based on the computations of form IRS 5405.
•Fees and charges for the tax credit advance loan are not to exceed a nominal amount necessary for preparing and administering the loan.
I am putting together additional information for my team and would be happy to share any information I have.
If you want additional info you can fill out the easy online form at
http://www.First-Time-Home-Buyer-Guide.info
I will be back to you usally in a few miniutes.
need help
Have no idea were to start with trying to use the tax credit as a down payment who do i talk to. Need to figure out what the first step is. can you contact me.
I need help on where to start
I need help on where to start
I have no idea of where to start with using the tax credit
I desperately would love to own my home. I have no money, but I have worked on my job for 7 years. I would like to know how to use the tax credit of $8000 as a down payment. Please help me.
Tax Credit Down Payment
I have been trying to purchase a home recently and from what I have heard the tax credit can not be used as a down payment and the lenders will not front this money before the end of the tax year. Reasons I have heard is that the buyer may default on his or her taxes for the year and owe back more than $8000 and then the banks lose again. Have you heard similar stories?
It's so funny how people
It's so funny how people think they know everything. I learn everyday that I know less and less than I thought I did, thank God for the lesson, and keep living life.
"Hmmm....you can now buy a home without putting up any money. Sounds like what got us into this mess."
My friend, what you don't see or understand is there are honest people out there in this country who are a product of the poor economy and the irresponsible companies that created it. During the dot com crash and Sept. 11th, I was laid off 3 times and sometimes went months in between desperately looking for jobs while working minimum wage to feed my wife and kids.
I have never owned property because of this run of bad luck that prevented my wife and I from even getting started, let alone getting back on our feet. I kept pushing until I found a steady job. But, it was difficult with looming bad credit and a tight income to even think of a 3.5% down payment.
I am happy to say that we are no longer stuck in $1500/month leases from the only real estate you can find out here, and that we are now closing on a home that will put us at $1200/month in a much more energy-efficient and healthy home BECAUSE of the $8,000 from the government. $300 a month means infinitely less stress for this hard working American, and the possibility that I can give up the second part-time job I work in addition to my full-time day job.
I don't agree with everything Obama says, but I can tell you this: the $8,000 tax credit is a start in the right direction to turning the economy around, and comes as a blessing for thousands of Americans like me who have wondered how and why all of their hard work could never amount to the "American Dream".
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1st time home buyer
Can I qualify for this if I've filed bankruptcy in the past but currently have no outstanding debt and repairing my credit (now up to 650 FICO)
reply to 1st time home buyer
From what I have been told is yes, I am in a simular situation, but my bankruptcy was nine yrs ago.
I live in Michigan which has not adopted the tax credit towards a down payment, there are only 13 states that do. I was told by my tax preparer that I can ammend my taxes as soon as the purchase goes though to get the money but that I have to purchase and close by Dec 1,2009.
Hope this helps.
if not call an account familar with this and ask.
Is it true that once you
Is it true that once you claim the First Time Home Buyer Tax Credit , you must keep the purchased home as your principal residence for the next 3 years?
yes
yes
Credit as Down Payment
The first tax credit for homebuyers had maximum amount of $ 7,500 and it had to be repaid over a maximum period of 15 years. The second change increased the first time home credit to $ 8,000 and potential home buyers had to December 1, 2009 to purchase a home and take advantage of the home credit. However, recently HUD allows the first time home credit to be used as part of the down payment and/or closing cost. This doesn't appear to be better than the credit that one gets and not have to pay it back. Hud is calling the first time home buyers credit funds extended to the buyer as bridge loan that have to be repaid. If I'm not interpreting this new HUD provision correctly, I would welcome some feed back. Thanks
No lenders
The problem is that my mortgage broker don't have any lenders that have stepped up to the plate to say that they will loan the money for the second mortgages yet. So what am I to do?
If all you are trying to do is have Zero down payment,
If all you are trying to do is have Zero down payment, why dont you use the USDA 100% financing program and keep the 8,000 tax credit.
USDA rural development loans offer 100% financing with no monthly PMI to borrowers who fall within moderate income requirements
All closing costs may be paid by seller concessions
USDA rural development areas only
Primary Single Family Residence only
No minimum credit scores, although 12 month credit is closely scrutinized with USDA loans
Ch. 7, Ch. 13 and foreclosures must be completed/discharged at least 3 years to qualify for a USDA loan
Under the terms of the USDA rural development program, an individual or family may obtain a USDA loan for up to 102% of the appraised value of the home, which eliminates the need for a down payment.
More Info is here
http://www.usda-ruraldevelopment.com/
Excellent! thanks! who know
Excellent! thanks! who know if still available!
what if your credit score is
what if your credit score is that good is there someone who could still help
Rural Development Loans
The Rural Development loans are still available. I was just approved for one and its the best thing out there for someone who has little to no money for a downpayment. I even got a really low interest rate (5%) - my mid credit score was 699. There is however a maximum income cap based on how money people would be living in the residence...and this includes them regardless of their name being on the loan.
The fact that everyone bought
The fact that everyone bought houses with NO downpayment over the last 5 to 10 years is the problem!! The ability to save a down payment while you are also paying rent is basically what proves you are responsible enough for home ownership!! Good luck with your home and I hope you stay employed through the coming depression.
i am a first time home buyer
i am a first time home buyer i havn't found a house yet but i know living in a one bedroom apartment with my husband and dog is just not big enough anymore
That is a great idea that
That is a great idea that they are offering an 8000 dollar tax credit when people qualify as a first time home buyer. Whether or not it works...who knows. I am wondering if this tax credit will add to our national debt??
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Carmen Arruda on 8000 dollar tax credit
Check out this story about the extension of the housing tax credit:
http://abclocal.go.com/wabc/story?section=news/politics&id=7087955
If you want to skip it, here's the interesting part (which they do not explain in detail):
1,400,000 homebuyers have taken advantage of the tax credit.
The story specifically states that NAR estimates that 350,000 of those wouldn't have purchased without the tax credit, meaning 1,050,000 would still have purchased without the tax credit.
This means the total cost of the program breaks down like this:
1,400,000 x 8,000 = $11,200,000,000 (11.2 BILLION)
This means the total cost to give the 350,000 people who wouldn't have purchased a home without the tax credit was the 11.2 Billion; which means:
11,200,000,000 / 350,000 = $32,000 per transaction
So:
It cost $32,000 for each individual who got the $8,000 tax credit, to motivate them to purchase a new home.
Wow.
8k is chump change compared
8k is chump change compared to the immediate decrease in value. Average buyer of average house at current rates of decline would lose that 8k in a few months, and then what? The gov’t and banks are conspiring to ensnare the middle class and below, those who would benefit most from allowing prices to settle without intervention such as tax incentives and depressed rates. The oligarchy needs a heavily-indebted working class to continue its rape of the country, and this is yet another assault.
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Can anyone plz tell me or
Can anyone plz tell me or guide me on how to fill out the forms for the $8,000 stimulus for first time home buyer? I have gone to several places to do them but everyone one is charging so much money and I can’t afford that right now! Thank you
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