FHA to allow use of 8000 tax credit

In a move that the NAR has been lobbying for, FHA today announced that it would begin allowing its lenders to let first time home buyers use the $8000 tax credit as a down payment on a home.

HUD Secretary Shaun Donovan made the announcement during his address at the 2009 REALTORS(r) Mid-Year Legislative Meetings and Trade Expo being held in Washington, D.C..

“We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a downpayment. So FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to “monetize” the tax credit through short-term bridge loans. We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit. FHA will be publishing the details shortly.”

This has enormous implications for the housing market