Can a Can First Time Buyer get the $7500 Tax Credit with FHA non-resident co-borrower?

There are a lot of reasons to buy real estate right now -- especially if you don't already own your home.

Interest rates are really low, prices have come down in nearly all markets, FHA offers buyers with credit scores down to 580 a variety of products, the USDA has a great zero-down program for rural areas, and there is a great tax credit/rebate that works like a zero-interest loan (or better) with payments of only $500 per year or maybe even less.

There is a lot of information on the Tax Rebate for first-time buyers directly from the IRS at http://www.irs.gov/newsroom/article/0,,id=187935,00.html and it is well worth review by both porential Buyers, Real Estate Professionals, and even Sellers looking to "marketing ideas" that may help get their property SOLD.

I have a couple of questions, that need answers!

If a frist-time buyer uses the FHA "kiddie condo" program to secure financing, does the tax credit apply? If it does apply, how do the figures work? If it does not apply, is there a way to make it apply?

We all should know about the FHA allowance of non-resident co-borrower(s). As long as there is a close relationship, a more established individual or individuals, can use their credit and income to help a more "dependant" individual purchase their primary residence. the primary borrower cannot have bad credit, but can have little or no credit and their income or lack of income is not an issue. One of the most common uses has a parent or parents as co-borrower(s) and co-owner(s) helping out their child in getting started -- hence the nickname "kiddie condo program". It is a great means toward college housing, in fact my daughter loves her townhome and I would rather make payments on it than her pay rent while she attends the University of New Mexico.

I consider myself pretty knowledgable on general tax matters, and a relatively good researcher. But I have not been able to find a definitive answer to these questions. Is there anyone out there with some answers?

Matt Peters, Albuquerque-Rio Rancho, New Mexico http://IdealNM.com