Tuesday, June 2, 2009

FHA & IRS Cooperate to Allow Tax Credit Bridge Loans

Up to now consumers have had to wait to receive their (up to) $8,000 tax credit.  They were not able to use it at closing to buy down the loan and lower monthly payments.  Up until last Friday, they were also not allowed to use a bridge loan to buy down the loan.  (They are not allowed to apply the tax credit to their 3.5% down payment.)

What happened Friday?  New guidelines from the FHA on how to Use First-Time Homebuyer Tax Cuts at closing.

Interested?  Go to http://tiny.cc/1NVoM  and read letter directly from the FHA website.

Bottom line:  First time home buyers who work with FHA approved lenders can get a bridge loan so they can apply their tax credit to reducing the loan. 

Expectation: First time home buyers will be able to pay more for properties.

Thanks to Shawn Watkins at Investors Workshops for the heads up.

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