Yesterday HUD announced:
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 a FHA-insured home. … 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.
At first glance I got real excited, thinking that my clients would be able to use the $8000 tax credit from the American Recovery and Reinvestment Act (ARRA) of 2009 up front for their down payments. Then I had to really read what was being said, and realized that this is not the case. While the HUD arrangement allows people to use the $8000 up front when getting an FHA loan, it cannot be used toward the 3.5% required down payment.
You can use the $8000 for closing costs, for down payments that are over the 3.5% required down payment, or to buy down points on your loan, to lower the interest rate. In other words, we are left with the situation where clients have to have that 3.5% down payment, and for many these days it is really difficult to come up with that much cash.
The way it works is that the lender does a “bridge loan” so the person can use that tax credit right away. In our area this might be helpful when someone wants to purchase a manufactured home, as we cannot use USDA loans (with their -0- down payment) on them. However, it would be just as easy for the purchaser to file a revised 2008 tax return, and get that $8000 in a couple of weeks. See my article on the $8000 tax credit for more info. (Talk to your tax preparer to find out more about this solution).
We have been enjoying some beautiful sunny weather the last few days. Today the sun is shining and the skies are blue. We have the office doors open, and it feels so fresh inside. The grass, bushes and trees are still wearing there freshest green colors. Of course, there is the noise from the busy street (highway 3) outside our doors. We expect to reach 76 degrees today. However, when the temperature starts to get close to 80 degrees, I start to get too warm! I can’t imagine living somewhere where the temperatures climb up over 100!
In our local news today I noticed that the Timberland Library system has voted to start charging overdue fines. Oh, oh… I’m going to have to pay attention now. Most of the time I get my borrowed books back before they are due, but every now and then I miss by a day or two. I’ve gotten rather casual about it, because there is no fine. At least I have until October to change my behavior, and make sure I get all my books back on time.
The Hood Canal bridge, closed for repairs, is expected to be opened sooner than expected. Evidently the good weather we have been enjoying has made a big difference in being able to get the project finished. This is good news for me because our family reunion is coming up soon, and we often take the bridge route to return home from Fort Flagler.
I think I will try to recommend this post to my friends and family, cuz it’s really helpful.
I would hope these incentives will motivate home buyers across the nation.