$8000 First Timer Buyer Tax Credit now in play as downpayment option...

After much debate HUD has authorized the use of the $8000 first time buyer tax credit to be used as a downpayment, however there are a few ground rules. To qualify as a first time buyer you must not have owned a primary residence in the past 3 years. First, the credit can NOT be used to cover the 3.5% FHA loan down payment requirement. It can be used toward other closing costs. There are also loan limits of $90,000 for a single perosn and $170,000 if married. Additionally, the credit is claimed using IRS Form 5405.

HUD posted a letter to lenders instructing them on the program and released information via the HUD.gov website yesterday, May 29th. Please visit the following links for the letter to lenders, the press release issued May 29th by HUD, and an overview of $8000 First Time Buyer Tax Credit.

http://www.hud.gov/news/release.cfm?content=pr09-072.cfm

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-15ml.doc

http://www.irs.gov/newsroom/article/0,,id=204671,00.html