Use $8,000 Federal Housing Tax Credit at Closing Table

HUD Secretary Shaun Donovan addressed members of the National Association of Home Builders (NAHB) this morning at a special session held during the association’s Spring Board of Directors’ Meeting in Washington, D.C. and Atlanta Real Estate Forum was here to get all the details!

Donovan outlined the “Making home affordable” plan to get single family housing moving. It includes:

• Concerted actions by Fannie May and Freddie Mac
• Families with good credit will have the opportunity to refinance through Fannie and Freddie
• For families on the verge of losing homes there is a plan to aggressively modify loans and bring down payments to levels they can afford.

Most importantly, details of how the $8,000 home buyer tax credit can be used have just been released in the long awaited mortgagee letter. First-time buyers utilizing FHA financing will now be able to use the $8,000 federal housing tax credit at closing instead of having to wait for the refund.

Specific highlights of the mortgagee letter are:

• borrowers can immediately apply the funds to their downpayment
• homebuyers can use tax credit for non HUD products, pay upfront interest products, or use for downpayments above 3.5%

“We believe this is a real win for everyone,” said Donovan. “Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation’s housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away.”

Because of this tens of thousands of Americans will now be able to buy a new home.