Home Buying in 85302>Question Details

Sam, Home Buyer in Phoenix, AZ

Can I apply a portion of the IRS first time buyer credit as part of the down payment?

Asked by Sam, Phoenix, AZ Mon Jan 26, 2009

Help the community by answering this question:


HI Sam,

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
0 votes Thank Flag Link Thu Sep 3, 2009
Sorry Sam, you are not able to do this. Due to you not even qualifying until you purchase a home. That is if you are what the government is saying is a "First time home buyer" I would recommend talking to your realtor or your tax advisor, just to see if there are any unseen factors in qualifying.

Steve Schexneider
The Schexneider Group
If you have any other questions or concern about Real Estate, Let me know.
0 votes Thank Flag Link Thu Sep 3, 2009
Hi Sam,

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.

Buyer's Agent
0 votes Thank Flag Link Mon Jan 26, 2009

You will recieve it after you close the loan.

Please contact a lender for more details.

Feel free to contact me with any other questions
0 votes Thank Flag Link Mon Jan 26, 2009
From this web page

"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
0 votes Thank Flag Link Mon Jan 26, 2009
p.s. Sam, if you'd like a referral to a local, reputable, experienced lender, I'd be happy to refer you to one. Just let me know.

0 votes Thank Flag Link Mon Jan 26, 2009
Hi Sam!

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!

0 votes Thank Flag Link Mon Jan 26, 2009
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