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$8000 Tax Credit To Be Allowed For Down Payment in conjunction with FHA mortgage programs for Florida buyers.
HUD has approved the use of the $8,000 tax credit to be used as a bridge loan for down payment on FHA insured loans.
In what could be a huge boost to the housing market, HUD Secretary Shaun Donovan’s has decided to allow Florida home buyers to use the $8,000 first-time home buyer tax credit in conjunction with FHA financing to help cover their down payment and closing costs on Florida FHA mortgage loans.
One of the biggest challenges for Florida first time home buyer is saving up enough money for a down payment on their home purchase. The FHA mortgage program in particular requires the borrower to come to closing with 3.5% of the purchase price as their down payment. Often borrowers have to borrow these funds from family or close friends in an effort to take advantage of the historically low housing prices that are now available to Florida home buyers.
The measures announced by HUD would allow FHA-approved lenders; federal, state and local government agencies; and FHA-approved non-profit organizations to supply Florida home buyers with short-term or “bridge loans” of up to 10% of the purchase price to use for the down payment of a Florida home. These funds equate up to $8,000 first-time home buyer tax credit.
Longer term loans secured by second liens can also be used by government agencies and FHA-approved non-profit organizations to facilitate home sales. Several state housing finance agencies have introduced such programs and a number of agencies are considering that possibility.
More information about these programs can be found on the National Council of State Housing Agencies Web site at http://www.ncsha.org/section.cfm/3/34/2920
Previously, the Florida home buyer would have been unable to access the tax credit until they filed their next annual tax return or an amended 2008 tax return and received the refund from the IRS. Until then they borrowed the funds from family and friends with the understanding that they would be able to pay it back after they filed their income taxes.
The next step is to see how Florida FHA-approved lenders use HUD’s new guidelines to actually monetize the tax credit for first-time home buyers and structure the payback provisions o f the loans. NAHB encourages lenders to act promptly to put these provisions into place.
To qualify for the tax credit, Florida first-time home buyers must actually close on their home purchase by Dec. 1, 2009. Florida Buyers can take the credit on their 2008 or 2009 income tax return.
Thomas Martin
1st Continental Mortgage
http://www.fhamortgageprograms.com/florida/
954-391-8387
http://www.realtor.org/press_room/news_releases/2009/05/re_summit
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