I thought since so much has been in the news about this tax credit (read previous post to see if you qualify for this benefit) being used for a down payment, that I would take the time to inform you that currently there is no funding mechanism for using the tax credit as your down payment.
From Anette Sieverson at Pacific Residential Mortgage:
“There has been a lot of email correspondence (and a few retractions) about the $8000.00 first-time homebuyer credit being available to use on FHA loans. Anyone who has sent out information about this has really jumped the gun!
Though HUD put out a Mortgagee Letter on Friday, May 29 with their guideline for use of the tax credit, NO lender in OR or WA is offering or allowing the use of the tax credit at this time. Also, HUD specifically in their Letter states that the tax credit is NOT to be used toward the 3.5% down payment but can be used for closing costs, addtional down payment of buying down the rate.
Again, this is NOT available at this time. We don’t know how it will work or IF it will even be made available. I will let you know if it becomes available and will provide details at that time. Please feel free to contact me with any questions.”
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