Closing Chicago Real Estate

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Here’s HUD’s release and an article in explanation.  We wrote about another take on accessing the $$ here.  Here’s the blurb from HUD:

Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration’s new $8,000 first-time homebuyer tax credit toward the purchase costs of an FHA-insured home. Donovan said that today’s action will help stabilize the nation’s housing market by stimulating home sales across the country.

The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today’s announcement details FHA’s rules allowing state Housing Finance Agencies and certain non-profits to “monetize” up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA’s new mortgagee letter, visit HUD’s website.

So we’re talking a scenario a lot like some of the old homebuyer gift programs it looks like to me. A 3rd party will “lend you” in advance your tax credit dollars that you can use at a closing and then you payback these funds at a later point when you actually get the tax credit.

I don’t really like this annoucment too much. I’d rather file for the credit from IRS and just get the money…there have to be some carrying cost if a 3rd-party non-profit lends this to you.

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