13 MayTax Credit for Down Payment…..the Rest of the Story!

Just like the Lone Ranger might say to his horse, Silver…..WHOA!

Here is what is being left out of the press releases that you need to be aware of…….HUD/FHA can approve the ability to allow the borrowers to use the government tax credit toward the down payment, but who is fronting the money?

 Where Will the Down Payment Come From?

Typically FHA loans require that any secondary financing only be granted by certain entities.  This would include government agencies and non-profits.  We have to find out if there are any government agencies or non-profits in your area are willing to provide this financing AND if they have funds to do so.  

As explained in Get Your $8,000 Tax Credit Now!, Colorado Housing and Finance Authority  (CHFA) is offering a product, available in the state of Colorado, that provides for a $6,000 loan that needs to be paid off by June 30, 2010 or there is a $72.80 payment (max based on $6,000 second mortgage, amortized over 10 years at 8% interest as set by CHFA) that begins July 1,  2010.  This loan can only be used with CHFA’s 1^st mortgage for First time homebuyers.  The intent was for the buyer to pay this loan off with their tax credit, but allows for the borrower to change their mind and make a payment instead.  

 So There Are No Other Options?

Whether or not HUD/FHA will soften this rule to allow other entities remains to be seen or what other parameters are actually released by HUD so for now, WHOA!  For other options check out our post on how to use the $8,000 tax credit now.

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About the Author | Scott & Marla Wynn

Scott & Marla Wynn are mortgage lenders with a focus on education. We believe an educated customer is our best customer. The mortgage industry has complicated the process of obtaining a mortgage so much that most customers believe the best way to select a mortgage lender is to inquire about rates and fees. Although rates and fees are an important part of the mortgage process, there are much more important areas to be concerned with. Lending A Hand was created to pass along our experience, knowledge and research to YOU to allow you to become a more educated mortgage customer. If you are planning a home purchase or refinance and live in the state of Colorado, we hope you select the Wynn Team as your mortgage lender!