FHA to allow $8000 first time homebuyer tax credit to be used as down payment
The FHA will allow the $8000 first time homebuyer tax credit to be used as a down payment. US Department of Housing and Urban Development Shaun Donovan made the announcement at the National Association of Realtors legislative summit this morning. The official announcement and details from HUD are expected to be made during the week of May 18.
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The first time homebuyer tax credit has sparked significant buyer interest in the Charleston real estate market this year. The combination of low mortgage rates, lower home prices and the $8k tax credit has motivated many first time buyers to become homeowners. While all buyers should have some cash reserves before considering buying a home, this will help many potential buyers who just didn't have the minimum 3.5 percent down payment necessary to qualify for an FHA mortgage loan.
For more detailed information on the $8k first time homebuyer tax credit, click here.
IMPORTANT UPDATE: Not so fast. The official announcement and details have not been announced by HUD yet. Lots of contradictory information is currently blazing around the Internet at the speed of well, the Internet.
EVEN MORE IMPORTANT UPDATE: HUD Secretary Shaun Donovan announced that if you use a FHA loan, the tax credit can NOT be used for the first 3.5 percent of the down payment but may be applied toward your closing costs and any additional down payment.