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Tax credit can now be turned into cash while closing!!!

Shared by Niicss on Thu Jun 11, 2009 3:44 am
Great news for first time homebuyers! Henceforth the first-time home buyers nationwide will be able to turn their federal tax credit of $8000 into cash during the closing if they are using FHA mortgage. If you're using a FHA backed lender to fund your loans, you'll be able to use the $8,000 tax credit for settlement fees, escrow charges, higher down payments or to lower your interest rate. However, the Department of Housing and Urban Development clarified that buyers obtaining FHA loans through private lenders would have to put in at least 3.5% down-payment. Source: http://www.latimes.com/classified/realestate/news/la-fi-harney7-2009jun07,0,7341387.story

Community Members Opinion

sara

Joined: 05 Jul 2006

Moderator
Posts: 2645
Location: New Brunswick, New Jersey

488.43 Dollars($)

Posted: Thu Jun 11, 2009 3:53 am Post subject:

Hey Niicss, This is really a great news First time homebuyers will be definitely benefited due to this new law. Apart from filling in the mortgage application form, the borrowers will have to fill-out the IRS Form 5405. This form is a request to the federal government on the borrower's behalf to send a tax credit check. Most buyers are expected to opt for the amended return route. Also first time homebuyers will have to proof that you have no outstanding judgments, liens, unpaid taxes or other obligations. These obligations may reduce a borrower’s tax credit. Take care.

morana

Joined: 11 Jun 2009

Posts: 1

0.09 Dollars($)

Posted: Thu Jun 11, 2009 1:42 pm Post subject:

Hi this is great news as i am a first time home buyer thanks!

jenkin7

Joined: 04 Jun 2007

Posts: 4537
Location: Hawaii

728.43 Dollars($)

Posted: Thu Jun 11, 2009 10:44 pm Post subject:

Hi Niicss, It's a great news indeed. Thanks for sharing it with the community. It will no doubt help many of the home buyers who do not have too much of cash to put down for the loan upfront. The 2009 tax credit has been quite popular with the homebuyers as, unlike the 2008 version of the tax credit, it does not have to be paid back to the Govt. Now, with the official word coming from the Obama administration that the new tax credit could be turned into cash to pay for down payment, escrow charges etc., this 2009 tax credit program is only going to get even more attractive and popular. This move will attract a lot of the potential home buyers who were not able to purchase a home for lack of down payment, and will thereby help in reviving the downturn-affected real estate market.

Samantha

Joined: 16 Sep 2005

Community Mentor
Posts: 1609
Location: MASSACHUSETTS

150.97 Dollars($)

Posted: Fri Jun 12, 2009 6:10 am Post subject: using tax credit to pay for closing costs and down payment

Hi all, It is good to see the FHA taking initiative in helping first time buyers use their tax credit for down payment and closing costs. But the final guidelines issued by the FHA on May 29 stated that home buyers need to use at least some part of their own money while making a minimum of 3.5% down payment. This can be done either by cashing out personal savings or borrowing from friends or relatives. So that means, buyers can't utilize the entire tax credit for their down payment requirements. However, one thing that first time buyers need to ensure is, there should be no liens, judgments, unpaid taxes or other obligations on their homes if they wish to get the full amount of tax credit available. Samantha _________________ Know how to compare lenders with mortgage booklet

brian3
brian3

Joined: 09 Jun 2009

Posts: 80

21.31 Dollars($)

Posted: Fri Jun 12, 2009 6:32 am Post subject:

Samantha you are correct they must have a minimum 3.5% of their own funds, they cannot borrow from family or friends, the money has to be a gift from relatives and that can account for that 3.5% needed. _________________ Brian F. Foster Mortgage Banker BFF Mortgage 7057 John F. Kennedy Blvd North Bergen, NJ 07047 201-305-5149 First Residential Mortgage: Licensed direct lenders in NY, NJ, CT, PA, FL, VA, MD, NC, SC, TX

elnoralittle
elnora.little

Joined: 01 Oct 2008

Community Expert
Posts: 285
Location: Maryland

26.35 Dollars($)

Posted: Tue Jun 16, 2009 8:28 am Post subject:

do you folks know many lenders able to utilize this yet? _________________ Elnora Little First Home Mortgage First in Customer Service! 301-437-5605


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