http://www.nakedcapitalism.com/2009/09/guest-post-first-time-homebuyer-tax-credit-program-morally-hazardous.html
WHAT ARE THE ODDS THAT SOMEONE WHO "NEEDS" AN $8000 TAX REFUND TO MAKE A DOWNPAYMENT ON A HOUSE AND HASN'T SAVED THE MONEY UP TO NOW WILL BE A GOOD CREDIT?
First-time homebuyers who would otherwise qualify for the $8,000 tax credit, but don’t have the money for a down payment or closing fees, may now be able to get a loan to help cover those upfront costs.
The U.S. Department of Housing and Urban Development (HUD) announced in May that the Federal Housing Administration (FHA) will allow state housing finance agencies to provide second mortgages “monetizing” the tax credit so that borrowers can use the funds toward their down payments and closing costs for the purchase of homes with FHA-insured mortgage loans.
“This is great news for thousands of families who want to take advantage of today’s low interest rates, competitive prices, great selection and the federal tax credit that is only available until Nov. 30, but could not save enough money for a down payment and closing costs,” said National Association of Home Builders Chairman Joe Robson.
HUD also announced that FHA-approved lenders may purchase the tax credit from the home buyer in advance, so the home buyer can use the funds for closing costs or to make a down payment in addition to the 3.5% minimum. Home buyers who go directly to FHA-approved lenders will still need to come up with the 3.5% minimum down payment that is required for an FHA-insured loan.
The National Council of State Housing Agencies has a list on their website (ncsha.org) of state offering first-time home buyers tax credit loan programs. For information on the $8,000 first-time homebuyer tax credit, go to federalhousingtaxcredit.com.
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