Good news for first-time homebuyers, who will now have access to quick cash to help them with their down payments.
The U.S. Department of Housing and Urban Development (HUD) announced that first-time homebuyers using FHA-approved lenders can now get an advance on the $8,000 tax credit created by the stimulus package and apply it toward their down payments or closing costs.
Until now, the only way to receive the $8,000 first-time homebuyer tax credit was to claim the credit when you filed your 2008 or 2009 tax return. By creating the ability for first-time homebuyers to receive the money in advance, this should result in more homebuyers entering the market and stimulate new home sales.
The announcement details FHA’s rules allowing state Housing Finance
Agencies and certain non-profits to ‘monetize” up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments.
The initiative also authorized similar programs already offered in Colorado, Missouri, New Jersey, Pennsylvania, Tennessee, Washington and other states. To quickly infuse cash into their housing markets, the housing finance authorities in these states created bridge loans to allow buyers to borrow against the $8,000 credit and then repay it with their tax refunds.
It will now be up to the State of Georgia or other non-profit organizations to implement a program under the guidelines set out by the FHA.
Needless to say, it is a buyer’s market. With the $8,000 first-time homebuyer tax credit and the $1,800 Georgia homebuyer tax credit, low interest rates and great home prices, now is a great time to buy a home.
Contact us if we can be of assistance in your Smyrna Vinings home search or if you have any questions on the tax credits.