First-time homebuyers in Spring, The Woodlands, Tomball, Conroe, and Houston will be better able to utilize the $8,000 tax credit created under the Obama Administrations’s “Making Home Affordable” program. The Department of Housing and Urban Development announced late last week that borrowers would be able to “monetize” the tax credit for use as additional down payment funds to to offset closing costs on FHA-insured mortgages. While you will not be able to use the funds to replace the required 3.5% down payment under an FHA mortgage, it does represent a way for many home buyers to tap into this resource, previously only accessed once your house was closed by filing an ammended 2008 tax return.
We are still awaiting additional details, but a home buyer will be able to essentially get an advance of these funds through secondary mortgage financing provided by the FHA or through a non-profit organization. Whether there will be a way to apply this strategy to conventional financing is uncertain, though some states have already provided such a means through state housing authorities.
For the official news release from H.U.D. click this link
If you have additional questions, please feel free to give us a call at (832) 286-1600