I need to revise my answer, but it may be a bit too late.
You are now allowed to use your potential tax credit for being a first time buyer as part of your down payment and/or closing costs. However, you cannot use in inplace of the required amount you need, but in addition to it. Also, in order to do this, you must go through a non profit organization (NPO) to administer it. And it's actually a loan....interest free, but still a loan. The NPO may charge you an administration fee and other misc fees but they would be rather inexpensive. If the NPO loans you $8000, but you actually only get $6000 from the gov't, you still have to pay back to the NPO, the full $8000.
Besides all this, I'm not aware of any NPO's in the Phoenix area administering this program.
Buyer's Agent Realtor
The Schexneider Group
If you have any other questions or concern about Real Estate, Let me know.
No, you cannot use the tax credit that you MAY qualify for AFTER you purchase a home for your down payment which is required in order to purchase it. However, your down payment can be given to you as a gift from friends, family, church, etc and I know of some organizations to go to for down payment assistance.
"Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. No other applications or forms are required. No pre-approval is necessary; however, prospective home buyers will want to be sure they qualify for the credit under the income limits and first-time home buyer tests."
You can't use it as a down payment because you don't receive the credit until after you purchase a home.
For more info consult the above website or google federal housing tax credit
Unfortunately, you may NOT apply it to down part of the transaction. It's not a buyer credit, it's a buyer TAX credit, and it comes with a few strings. But it's still a great incentive for first time buyers. You should really discuss this with your Loan Officer, who can consult with you on your other options, i case you're short on for down payment funds.
All the best!