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On Tuesday, May 12, 2009, Shaun Donovan, Secretary of the U.S. Department of Housing and Urban Development, said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.
Previously, most buyers wouldn't receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.
“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 says. His remarks came in an address to several thousand REALTORS® gathered Tuesday morning at "The Real Estate Summit: Advancing the U.S. Economy," at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C..
He says 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.
Too bad there's nowhere on Long Island where $8,000 would be anywhere near enough for a downpayment. If you don't already have a lot more money that that saved ... pfffft! You will get nowhere. LOL. Great for flyover country (aka the real america) of course!
If more buyers are thinking of buying a house because of this, it will drive up the sale price a little simply because there is competition because of more buyers... this is exactly what the policy was implemented for.... so lets say a house that would have sold for 300k may sell for 305k because of that.... what just happened ? you gave the 5k out of your 8k to the seller.... so you got 3K.... still good ? Lets see the 5K that you got hit with is the extra loan that you have to take out now.... and over 30 yrs you pay about 4K interest on it.... so whats your net gain you ask ?
Its 3K - 4K = negative 1K !!
And buyers are jumping the fence to grab the $8K credit... wow !!
Too bad there's nowhere on Long Island where $8,000 would be anywhere near enough for a downpayment. If you don't already have a lot more money that that saved ... pfffft! You will get nowhere. LOL. Great for flyover country (aka the real america) of course!
Not so fast, the 8K would be enough for the down payment on a $266,000 FHA loan at 3% down. If a buyer could scratch together 5K down and negotiate the closing costs into the price they're ready to close on a 433K house with only putting up 5K out of pocket...
Not so fast, the 8K would be enough for the down payment on a $266,000 FHA loan at 3% down. If a buyer could scratch together 5K down and negotiate the closing costs into the price they're ready to close on a 433K house with only putting up 5K out of pocket...
I agree to a certain extent with your statement.
FHA needs 3.5% min these days.... regardless, if you are buying a sub 300k house then the 8k will go a long way towards closing FHA loans. 300k for a house probably will get you a pigeon hole on LI though !
Bottom line is the gov't is giving you 8 grand. It would be foolish not to take it.
...the govt is giving you 8 grand to buy a house that will lose value and that you will pay hundreds of thousands in interest on. It's not quite so easy as "here's some free cash!!"
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