Hi Jerry,

If you would like I can send you an informational package about the 8,000 tax credit to help understand the ins and outs and also answers frequently answered. You can e-mail me direct at kellicassidy@remax.net

Kelli Cassidy

this is available in 10 states and massachusetts is not one of them.

Hello Jerry:
Cart before the horse is right. The Secretary of HUD announced that the credit coud be used for downpayment before she checked with the lenders who are supposed to give the bridge loan to accomodate the process. As of this date some banks will do that. You purchase the house, the bank in addtion to the mortgage gives you a bridge loan for the downpayment (I do not know if you can use it for closing costs) and you pay it back when you receive your check after you file your taxes. Check with your lender on it. As of today, the credit expires on Dec. 1, 2009. The NAR is trying toget congress to extend it through 2010, make it applicable to eveeryone who buys a house, not just first time home buyers, and to raise the amount to $15,000. Hope this helps,

Judy Bell Dowdall ABR,SRES

There are two ways to do so.

One is to adjust your withholding so that you receive more money from your employer. The IRS has put out information on that. And that can be done at any time; it's not dependent on closing on a home.

The second is a revision to FHA-funded purchases. Here's an excerpt from a HUD news release:

"Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration's new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today's action will help stabilize the nation's housing market by stimulating home sales across the country.

"The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today's 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. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA's new mortgagee letter, visit HUD's website.

"We believe this is a real win for everyone," said Donovan. "Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation's housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we're doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing."

Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today's announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower's own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today's action permits the first-time homebuyer's anticipated tax credit under the Recovery Act to be applied toward the family's home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit."

You can find complete information at http://www.hud.gov/news/release.cfm?content=pr09-072.cfm

At this point using the $8000 as a downpayment is not a reality. At least not in California.

Some states are working on it.

But at the present time it is a TAX CREDIT that you get when you file your Federal Income Tax.

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IRS page on the Tax Credit:

http://www.irs.gov/newsroom/article/0,,id=187935,00.html


National Association of Realtors web page on the Tax Credit:

http://www.realtor.org/home_buyers_and_sellers/2009_first_ti…


National Association of Home Builders has a good page on the Tax Credit:

http://www.federalhousingtaxcredit.com/2009/faq.php


Talk with a CPA or Tax Attorney if you have personal questions about the guidelines.

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Best wishes to you,
Fred
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