Most of you have already heard that Secretary of the U.S. Department of Housing and Urban Development announced yesterday that FHA is going to permit it's lenders to allow home buyers to use the $8,000 tax credit as down payment.
First of all, it was not clear that this was to be a short term or bridge loan from approved entities. And there are no entities offering this short term loan as of yet.
Second, the letter has been removed from HUD"s website and we have been told that it has been recinded. Speculation is that it goes against HUD's policy of allowable sources of funds for closing which includes:
1. Buyers own funds
2. Gift from relative or employer
3. Monies from Federal, state and Local Governmental agencies and non profit agencies of government.
4. Secured funds ie 401k loans
As of now, nothing has been changed in the guidelines to allow for this short term bridge loan against a future tax credit.
Please clarify this with your clients who may be getting mis information from the media, or other lenders that have jumped the gun and not gotten the facts.
For more information, please visit or refer your clients to my website for recent blogs about the subject.
www.colleencraig.com
In a later email from another lender, Eric Mitchell of Prospect Mortgage:
"FHA has announced they will allow buyers to finance their tax credit and use that as their down payment. However, this new policy will probably take at least 30 to 60 days to filter through the system before investors will buy the paper. The announcement was made but the system is not allowing it yet."
The Obama Administration's Housing and Urban Development Department has thrown open the doors to high expectations for many first-time buyers. How this will play out in the short, medium, and long term is just unknown at this point.
`` SCV Home Team
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