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I'm looking at a USDA loan, but came across an ad from a real estate agent who stated that her house could be purchased with an FHA (this was just outside of USDA eligible limits) and the $8000 rebate could be used as part of the down payment. Is she correct? I have never heard of this before, as I assumed the rebate is something that would come with next year's tax refund and therefore wouldn't be immediately available to use toward a down payment.
I'm looking at a USDA loan, but came across an ad from a real estate agent who stated that her house could be purchased with an FHA (this was just outside of USDA eligible limits) and the $8000 rebate could be used as part of the down payment. Is she correct? I have never heard of this before, as I assumed the rebate is something that would come with next year's tax refund and therefore wouldn't be immediately available to use toward a down payment.
Just remember it is not free,a person should save for down payment,why don't people see the situstion the country is in now,something for nothing attitude.
In Texas, you can get a loan that is interest-free for the first 90 days for up to $7,000 of the $8,000. The catch is, you have to pay an admin. fee to get the loan and you also have to secure the note with a 2nd lien on your mortgage.
What a bad idea for a state (there are several) to get even further into the mortgage business. We're still in the mode of 'there's always a way' rather than scrimping and eating rice & beans to save money for a down payment. Nobody's fault really, that's the way we were trained. We can have it all!
Aside from certain states' additional incentives my understand is this:
You still need to have the money for a down payment. The purchase of the home must be completed before December 1st. The tax credit/rebate or whatever the heck it is, does not even come into play until next year. The credit is claimed when you file your 2009 income taxes. Sushi66, I believe you are correct.
"There are companies that will loan you the $8,000, to be repaid when you receive the tax credit."
I hadn't heard of this before...and what another colossally bad idea, imo. I would be especially careful with these types of companies. They are 'loaning' you the money for a down payment or for what? Sounds extremely snake-like to me.
It's kind of like buying new furniture on a no-payment for 12 or 24 months plan. They are counting on people not being able to pay off the bill. Then you owe the entire amount plus accrued interest. This is how people get themselves buried under debt and how loan sharks get rich. Vultures ~ [ranting ]
I think people should proceed as though there was no tax credit. Don't expect it, don't plan on getting it. It's much more reasonable - and safer to boot!
I assumed the rebate is something that would come with next year's tax refund and therefore wouldn't be immediately available to use toward a down payment.
You can receive the tax credit for this year by filing an amended return.
As SeeBee stated, in some states, you can get a loan against the tax credit for down payment assistance. Criteria vary by state, but in Texas (where the funds are made available by the TDHCA), this is a 90-day interest free loan (10% per annum afterwards) whereby borrowers can use up to 5% of the first lien amount up to a maximum of $7,000 at closing. Borrowers must go through a HUD-approved lender to have this loan administered and borrowers must complete IRS Form 5405 and file an amended IRS 2008 return.
As SeeBee stated, in some states, you can get a loan against the tax credit for down payment assistance.
Sorry, I meant Dark of Moon provided the correct information by stating "There are companies that will loan you the $8,000, to be repaid when you receive the tax credit."
In Missouri, the MHDC loaned my down against my mortgage for my down and closing but I had to go FHA and agree to a 6.1% interest rate on the overall loan. I received $6750 of this $8k, interest free for 12 months. I amended my 2008 taxes and now waiting for the refund to arrive. This is not a bad thing as some stated above. This is INTEREST FREE and an incentive for first-time buyers. I did hear that HUD is now doing the same thing as Missouri for all 50 states but call HUD and ask. The only problem I foresee is that many lenders don't understand how to work with the credit but shop around.
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