No, you cannot use the money for down payment. It is a credit you will get when you file your income taxes next year.
I wrote a post about it yesterday. At the bottom of the post is a link to a very good chart with more details on the credit. I hope this helps you.
Check your specific area. I am based in LOL, & Pasco just received $19 million for the The neighborhood stabilization program (see below article). Call or email me if you have any more questions or would like help finding a home. Thank you.
By KEVIN WIATROWSKI | The Tampa Tribune
Published: October 21, 2008
NEW PORT RICHEY - Starting early next year, Pasco County will offer $20 million in down payment help to prospective home buyers â€“ part of a push to put people back into the foreclosed and abandoned homes that riddle the county.
County commissioners today effectively rewrote a proposal by the county's Community Development office for spending $19.5 million in federal housing money aimed at addressing the national housing crisis. The county will add $6 million of its own housing money to increase the federal funding's reach.
The proposal original presented to commissioners would have spent $16.3 million on buying and rehabbing run-down homes to make them sellable. Another $4 million was put into helping low- and moderate-income people get mortgages.
Commissioner Michael Cox led the charge to restructure the spending plan with an emphasis on down payment help.
"That would leverage our money beyond belief," Cox said.
Cox, a certified financial planner, estimated the $16 million originally planned for buying homes could be turned into $436 million in home sales if shifted toward down payments.
"The problem with buying the homes is it makes us landowners," Cox said.
Commissioners gave the down payment help plan 10 months to work. After that, the plan can be changed to put more money into buying homes, Cox said.
Commissioners made no changes to the rest of the spending proposal, which allocates money for remodeling 15 homes for special-needs residents and demolishing more problem properties.
Pasco real estate agents, who packed the commission's meeting room, applauded the revised plan.
"We want to put as many new homeowners in these foreclosures as we can," said Greg Armstrong, president of the West Pasco Board of Realtors.
Pasco County qualified for the fifth-largest grant in Florida from the federal Neighborhood Stabilization Program. The funding was based on the number of foreclosures, vacancies and subprime loans in a given county.
Elsewhere in the Tampa Bay area, Hillsborough County qualified for $19.1 million and Tampa will get $13.6 million. Pinellas County and St. Petersburg got a combined $17.5 million.
Florida, which ranked second in the nation in the number of foreclosure filings in August, is expected to receive $541 million through the program, according to state officials.
The aid does have strings attached:
Aid recipients can make up to 120 percent of the local median income. In Pasco, that means a family of four making as much as $67,800 could qualify for help.
At least a quarter of the money must be spent helping people under 50 percent of the median household income â€” $28,250 for a family of four.
Houses must be bought at a 15 percent discount from their appraised value.
Pasco's portion of the program will be focused on some of the areas hardest-hit by foreclosures and subprime loans. That list includes the 34668 ZIP code in the Port Richey area. Other areas that could see federal funds are Wesley Chapel, Holiday and New Port Richey.
Three cities â€“ Port Richey, Zephyrhills and Dade City â€“ don't qualify for funding because they're not part of the county's Community Development Block Grant, the program that distributes large amounts of federal grant money.
Those three cities may be eligible for part of $92 million in housing funds going directly to the state government to be spread among counties and cities with low numbers of distressed properties, said George Romagnoli, director of the county's Community Development office.
Romagnoli agreed with Cox's desire to put most of the money into down payment help, but repeated his aim to buy and rehabilitate especially blighted properties.
"I have concerns there are houses out there that need our attention, that no one wants," Romagnoli said.
as the Realtor stated below, it is a tax credit that you get once you buy the home. If you do not have the down payment, FHA allows you to get it as a "gift". Also, there are areas of Pasco that the USDA is giving 100% financing for qualified individuals and all you need is $500 for the down payment. Let me know if you are interested in these type of programs.
The Szydlowski Team
Future Home Realty