In a speech this week HUD Secretary Shaun Donovan announced that FHA has come up with a way to allow first time home buyers to use the $8000 first time home buyer tax credit as a down payment at the time of purchasing a home. They will no longer have to wait until the following year and their tax refund to get the money.

Here is what Secretary Donovan had to say:

“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 down payment. 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.”  

At this time there has been no official HUD Mortgagee Letter released on this program, but it appears that HUD is going to amend the rules to officially allow borrowers to obtain a short term loan so that the money will be available at closing.

This has very positive implications for first time home buyers. As soon as more details are available they will be posted to our web site.

For all of your Victorville CA Real Estate needs: visit our web site at http://www.HomesOfVictorville.com