1st time homebuyer tax credit

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Formal guidelines from the Federal Housing Administration ...

.... have been issued regarding the first time homebuyer tax credit worth up to $8000. Many had hoped FHA would allow lenders to give the 3.5% down payment to buyers in the form of a 2nd loan on the property.

The 2nd loan would have then been paid off when the buyer received their tax credit. Unfortunately, FHA has decided not to allow what they consider a "no down payment" loan.

However, the good news is FHA will allow the tax credit to be used for closing costs and any additional down payment, which can help buyers to obtain a lower interest rate. FHA allows parents, employers and other government agencies to contribute towards the 3.5% down payment.

There are also a number of state housing finance agencies offering down payment assistance loans that can be used to meet FHA minimum down payment requirements. The FHA down payment can also come in the form of a 100% gift as long as it is from a blood relative and the monies need not be paid back.

You can give our office a call and I would be happy to discuss your options regarding FHA loan programs! Call 858-922-3377