Great news for first-time home buyers. U.S. Department of Housing and Urban Development secretary Shaun Donovan said that the Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a down payment.
Mr. Donovan wa speaking at the Mid-year conference of NAR in Washington when he said â€œWe all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a downpayment,â€ he According to Donovan, the FHA's approved lenders will be permitted to use the tax credit through short-term bridge loans which will allow eligible home buyers to access the funds immediately at the closing table. This will basically gives first-time homebuyers $8000 towards a down payment and/or closing costs on the new home.
I think this is a great step to help the housing market make a comeback as a down payment can often be a stumbling block for first-time home buyers. The government is finally stepping in to help them.