Most lenders won't allow , they don't want to lend u until IRS pays u the credit. U earned the credit only after settlement and apply to IRS. U need 2 make alternate arrangements for the down payment., U really need 2 talk 2 several knowledgeable lenders , if there is a way.
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I know this question/idea has gotten quite a bit of discussion among our local lenders. I have heard of circumstances where it was done, however, you would have to speak to the lenders in your area. For more info, check out the link below.
I believe you can use the $8000 toward the down payment if you are obtaining an FHA loan. Check with your lender for details.
You can also reduce your income tax withholdings in your paycheck to start collecting the credit. If for some reason you do not purchase the home (or don't qualify for the credit) you would have to repay it.
The first time home buyer credit is a tax credit that is applied at tax time so if you settled on a home prior to December 31 2009 you would be get the credit this filing season which has an April deadline. I have heard of some lenders willing to give you a short term loan against the tax credit but have not seen any actually do it at the settlement table. I am sure any program with a short term loan will have a lot of fine print so discuss it in depth with your lender.
Ask a lender if there are any programs that will allow you to do this. There were some state programs available in some areas. They allowed you to borrow the credit for the down payment kind of like a bridge loan. They are time consuming though and may no longer be available for the credit extension.