George S. May Business Blog

Use your “first-time homebuyer credit” as part of your downpayment

Secretary of the US Department of Housing and Urban Development (HUD), Shaun Donovan, pointed out that the Federal Housing Administration (FHA) will allow its lenders to credit homebuyers’ down payment the full $8,000 that they are eligible to receive as part of the first time homebuyer credit.

It seems that this will be the way it works: The FHA lender will create a separate loan that will fill the gap created between the sales closing and the date when the tax credit is received by the buyer. When the homeowner receives the check, the homeowner will repay the loan using the money from the tax credit. Now, currently there is no further word as to when homebuyers will be able to apply for the credit, however it is expected that in the near future those details will be released.

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