Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.
Previously, most buyers wouldn’t receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORSÂ® has been calling for the change.
â€œWe all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,â€ Donovan says. His remarks came in an address to several thousand REALTORSÂ® gathered Tuesday morning at “The Real Estate Summit: Advancing the U.S. Economy,” at the 2009 REALTORSÂ® Midyear Legislative Meetings & Trade Expo in Washington, D.C..
He says FHAâ€™s approved lenders will be permitted to â€œmonetizeâ€ the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.