Today at a meeting of the National Association of Realtors, Shaun Donovan, Secretary of the U.S. Department of Housing and Urban Development, said that the Federal Housing Administration (FHA) is going to permit its lenders to allow homeowners to use the $8,000 home buyer tax credit as a down paypment.
Secretary Donovan said that important changes will help consumers purchase a home. “We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan said.
According to Donovan, the FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.
We will continue to post information to the blog as more details are released.
UPDATE: May 19, 2009
That didn’t last long. As of May 18, 2009, the new rule was rescinded. Check out today’s blog for details.