Fed to first-time buyers using FHA financing to get advances on tax credit
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Home buyers using Federal Housing Administration financing to purchase a house can turn that federal tax credit into upfront money now. From the Associated Press’ ‘Government allowing FHA borrowers to get advances on $8,000 tax credit’ via Latimescom:
Thousands of first-time home buyers will be able to get short-term loans so they can quickly make use of a new $8,000 tax credit to pay for some of the costs of buying a home. The Federal Housing Administration on Friday released details of a plan in which borrowers who use FHA loans can get advances from lenders that let them effectively receive the credit in advance, so they don’t have to wait to get the money from the Internal Revenue Service.
So buyers who qualify for FHA mortgages can make a purchase with only 3.5% down and get the credit ‘advance’ or ‘loan’ to help out with closing costs. The thinking is this latest action will help sop up some of the ‘oversupply’ of housing. To me, it doesn’t seem like buyers will have enough invested to be motivated to stick it out should prices continue to drop.
-- Lauren Beale
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