Its Official – First Time Home Buyers get Tax Credit – But

It’s official.

FHA-approved lenders have been authorized by HUD to develop bridge-loan products that enable first-time homebuyers to use their federal tax credit for a down payment.

At first glance this seems like great news to be able to use $8,000 dollars for your down or with your down payment.

We believe many lenders will participate since the loans have to be structured as personal loans instead of a second mortgage or a mortgage backed line of credit.

That would make sense but it would break the law; so unless those statutory restrictions are lifted by legislation (and how long would that take) it will not happen.

The second reason is simply the time constraint because the tax credit program expires on December 1, 2009.  That is just not enough time for lenders to set up a program and operate it profitably.  Stay tuned.

Tags: First Time Homebuyers