Tallahassee Real Estate

New details released about the FHA $8,000 downpayment advance

New details have been announced that affect how the $8,000 first-time homebuyer tax credit can be used.

There has been a lot of miss information floating around about the $8,000 tax credit.  FHA loans require that a 3.5% downpayment be made by the borrower.  Speculation by many in the industry suggested that eligible first-time homebuyers would be able to use the $8,000 tax credit towards their downpayment. Unfortunately that is not true. First-time homebuyers will have to come up with the 3.5% downpayment on their own, then the tax credit can be applied to additional costs, including a higher downpayment, paying points to lower the mortgage rate, and paying closing costs. Lenders will treat the tax credit money as a second lien on the home until it’s paid back. This type of financial product may not be immediately available to buyers since lenders will need to create the internal programs to handle the process.

Nathan Cross, Realtor
The Naumann Group Real Estate, Inc
850.443.2125

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1. Gov. Charlie Crist signs $8,000 homebuyer tax credit advance into law Beginning July 1, 2009 First-time homebuyers who qualify for the federal $8,000 first-time homebuyers tax credit will be able to apply for downpayment assistance before they close on their home, and then repay the amount borrowed when they get their...