Len is correct but, the tax credit is extended as long as you are under contract by the end of April. You will have about sixty days from that point to close. This gives you almost six months to correct whatever is wrong that does not allow you to qualify for a loan.
On another note there are many lenders out there that have credit repair departments. So they can help you get to the point where you can qualify. I have two buyers presently in such a program and they will be ready to buy on the first of next year.
Unfortunately the government is not flexible. Unless they extend the tax credit again you will not be able to get the tax credit unless you are under contract by the end of April and closed by June of 2010.
Hope this helps,
If I understand you correctly, you want to take advantage of a short sale situation AND the Tax Credit, but you either feel or know you do not qualify for a mortgage at this time. While this is not a typical scenario, it may be possible on a narrow basis.
A homeowner who is in jeopardy of default can still agree to contract with you to buy their home. But you probably will not get the same "great deal" as someone who is buying a home via a typical short sale. The way this would work, in short, is the homeowner sales the home with owner financing that would include a balloon payment. You would make payments to the seller for a stated time, they would continue to hold title to the home, and at some point predetermined, you get your own financing to pay off the loan to the seller, who pays off their mortgage so the title can be transferred. Needless to say an attorney will be needed to draw up the paperwork, but at closing, it is my understanding that you will have sufficient documentation to qualify for the tax credit. This part should be confirmed with a CPA.
That's the good news. There is of course a down side. Finding someone to sell you a home like this will be difficult. They are not likely to be able to afford to pay agent commissions, so that would fall on you on top of downpayment and closing costs. What if you put money down on the home, make all your payments, and the seller still allows the home to be foreclosed. Sure, you'll have the right to sue. But in the mean time, where do you live? And assuming the you win the court case, you receive a judgement they may never be made good by the seller. This is something you should think about long and hard before you jump in.
If you would like to speak with an agent to bounce more questions off of, feel free to give me a call, 336-812-8128.