First Time Home Buyers Can Turn Tax Credit Into Cash
The first time home buyers tax credit which was increased from the $7000 high in 2008 to $8000 in 2009 has just gotten even better.
Housing and Urban Development Secretary Shaun Donovan has announced a change in federal policy that will allow first time buyers to turn that tax credit into cash.
Essentially, first time buyers eligible for the credit who apply for mortgage insured by the FHA will also be eligible for bridge loans or cash advances – up to the $8000 limit – to use for down payments, closing costs or other loan expenses.
According to the secretary, the idea is to “monetize” the tax credit, e.g. turn it into immediately spendable cash.
Under the guidelines drafted by the FHA, all lenders approved by the agency will be authorized to provide bridge loans secured solely by the tax credit at closing.
A small but growing number of states have started bridge programs to stimulate home buying and this announcement from the federal government is welcome news.
To find out who is an approved FHA lender in the Northern Virginia area and how we can help put you in your first home, give me a call at 703.927.4554.