Missy, Thanks for sharing this very timely article. " Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a downpayment."

This could make a big difference...... helping move some buyers/houses right now!

Hi Missy.  That is good news.

This might come in handy for many buyers (me included!).

Thanks for writing,

Ken

Missy - I like this idea as well.  If I were a qualified first-time homebuyer, I'd be salivating right about now.

Had not hear this yet Missy. Thanks for the heads up.

I've been waiting for someone to write this.  Thanks, Missy.  It's a step in the right direction.  Now we will begin to see mortgage companies advertise this a a done deal.

FHA better get ready or Congress better extend this program.  Time is running out. 

I can see a lot of folks not closing on short sales by Nov. 30.  Mmmmmmm.

A few of the states have already implemented like programs. 

Let's hope FHA doesn't implement some stupid rule that will exclude many.  That's their speciality.

I hope it really happens.  Many times the guidelines end up excluding almost everyone.

Seems we get hope like the Refin PLUS program and it's unworkable because of the limitations of LTV and CLTV.

This is great news, Missy. Glad to see AR is getting the word out for first time home buyers. I have one now who is going FHA.

Jeff

I had not heard this yet. Wow, that is exciting news. Half of my clients are first time home buyers!!!

This is great news that WE need to get out to the public. As I said on another post, it is amazing to me that the public, and many first time buyers in particular, don't know about the $8,000 bribe from Uncle Sam. So you KNOW they don't know about this additional nugget.

Florida is implementing a similar program but I don't think it goes into affect until July 1.  

Does anyone know if this Federal announcement is affective immediately?  We have a buyer who could really benefit from this NOW. 

Great information for home buyers. I gotta research this right away. I wonder what stipulations are, Is it still not required to be payed back in this instance?

Thanks for posting this! We sell exclusively to first timers, so this is great news!

Missy - thanks for providing this information, this is very important, as I am working with some FHA buyers right now.

I am anxious to hear more about the details, but this is exciting!

Thanks for the timely info Missy. Great news for qualified first time home buyers.

3.5% down is too high a hurdle?

Jeeze, I'm having flashbacks to foreclosures.

And what encouragement to fraud that FHA cannot begin to get a grip on already.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/07/AR2009030702257.html?hpid=topnews

I wondered if this would happen.......I think it's a good thing.  The vast majority of all the sales are with 1st time home buyers and they're seem to be cash poor and using every dime to get into their first home. Why not let them use the $8000.  They get it at some point anyway. Makes sense to me.  No I don't think this spells more foreclosure as lenders are scrutinizing every buyer to the 10th degree these days...they must be good guality buyers.

Thanks Missy!  Can't wait to share this news with our agents.

Mike, nope 3.5% is not too much to put down, but many folks have money but would rather save it to fix up a house with their cash.

As I said it is a bridge loan so we don't know if it will ultimately be worth it.

Lenn, my guess is they will have to extend at the very least, but have heard chatter they will increase it to 15K credit and include all buyers not just first time homebuyers. At least that is what NAR is pushing.

Missy - good news I had not heard.  Thanks so much.

This is great news indeed. I plan on forwarding the informaion to my local Board.

As a self-serving and selfish Realtor I would now love to see that first time qualifier taken off. Excuse me for stating the obvious but wasn't housing a big part of the financial crisis? Let's get this industry rocking again.

That's great news for buyers who are having trouble coming up with the down payment money! Thanks for sharing; I must've fallen asleep during the news!

Wow...more good news. It seems that this should really incentivize potential buyers. One less excuse.

That's a great deal but I bet there will be a lot more HUD foreclosures because of this. 

This will allow many to buy a home with no money down.  There's no risk involved for them. 

It's a great deal for the individual but I think that in the long run it will make things worse.

This is the right move as it simplifies the process. Hope they extend the deadline

That is wonderful!... GO BUCKEYES!

Missy, where is the reblog? I want to get this out fast.

Missy,

I thank you for posting this as it does trumpet a good move by HUD.

I personally feel like it is too little, too late though.

$8,000 down payment...  Is that towards a $50,000 home?   I read the above information in our local newspaper this morning, and it also said Home Values drop almost 50% in 1st Qtr from last year (which was a down year as well).  The avg home sale price was $50,100 which are mainly comprised of short sales and foreclosures.

I mean, in areas like Cleveland & Akron, Ohio and Flint & Ann Arbor, MI $50,100 can buy a decent house in a mildly desired area, but it cannot buy a nice home in a highly desired area.  I am just frustrated by the lack of credit to unfreeze and the lack of foresight by the governement... 

What good is an $8,000 tax credit or "down payment" if you have no job or job security and can't afford the other things that would come with a property purchase as well?

I digress.

Sean

Thanks so much for the update, Missy!  I think this will help 2 or 3 of my current buyers get off the fence.  :-)  I am curious to see what the charges will be for the bridge loan...

Missy,

Thanks for passing this along!!! Thanks,   Fran

Missy thanks for bringing this to our attention. This is some good news for sure. I have a couple of clients that will be thrilled to hear this. 

Great news! Thanks for the heads up on the new info. Hopefully this will help some first time buyers make the jump into home ownership!

I think this will help some people.  Perhaps at least to allow them to use their other money for paint, carpet and appliances on vacant homes.

I have buyers that this will be an answer to their prays! I am crossing my fingers and toes.

Yes, Yes, Yes! I agree, a step in the right direction. Can't wait to find out more details about the bridge loan.

Thanks for posting this Missy.

I am checking with my lenders to see if they are aware and set up underwriting wise to start doing this soon.  I think it will be a little bit complex, and might be a couple months away or at least a month away from lenders doing this. Do you have lenders ready to run with this?

Gonna take some tome to get the bridge loan part set up.

Maybe Ameridream will get involved, or some current State/County/Local bond program offices can use this when they are out of money.

Realtors: Please don't send your broke clients to the lenders yet!!!!!

As far as I can tell from independent sources, this is not a done deal yet.   For informational purposes, here is a link to the text of the prepared remarks delivered at NAR  http://www.hud.gov/news/speeches/2009-05-12.cfm.

Missy - This sounds like a really interesting step in the right direction.  Thanks for sharing this info!

Missy:  I simply refuse to look at this announcement as anything but positive.  At minimum it shows that a pro-active approach is being taken to the crisis.  It is a sign of encouragement.  I await the details with anticipation. 

Maybe this will help even more. The first time buyers have help the market move a little. Making it possible for others to move on with upsize or downsize as needed.

Thanks for sharing the information.

I'm thrilled to hear this news!  I believe it will keep us even more busy throughout the rest of the year!

Cool.

Missy! Good job on getting on it fast. Very VERY important for all of your readers to know (I'm sure you've seen my Tweets about keeping this one real) this depends on LOANS. Lenders must step forward and be willing to lend a BRIDGE style loan. I can give you about a dozen reasons off the top of my head why that is going to be difficult to swallow. Only HUD approved lenders (like my Novation) can extend the bridge loan which is unsecured - being an operative and important term. The other types of loans may be secured but must come from a government or HUD approved non-profit (community development organizations as example).

We're nowhere NEAR this being a reality yet but my goodness it caught on fire like a comet landed in the reflecting pool or something :)

I'm still checking with my lenders, and I'm finding they haven't seen anything about this as far as who, what, where, when and how much.. I'm not saying anything until I'm 100% sure.. I'm keeping my fingers crossed it will happen.

Hi Missy,...sounds great ...would lenders have to approve of it???....I hope so!

Greetings from Fort Lauderdale, FL

I don't believe this is currently an option.  It may come to fruition at a later date but dont be fooled....Right now it appears to not be possible.  Many things would need to change for HUD to accept this.  Also, it remains to be seen if lenders will sign on for this...

Missy, this is very good and timely news. I have a buyer who is thinking of going FHA when we find the right house for him. Thanks for keeping us informed.

HUD Secretary Announces Monetization of Tax Credit at NAR Real Estate Summit

Well, I hope this is NOT a big Maybe if so NAR should not have put it on Realtor. org. 

The link is in my post.

Joan, here is exactly how it was said from the prepared speech. Sounds like a done deal to me.

We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a downpayment. So FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to "monetize" the tax credit through short-term bridge loans. We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit. FHA will be publishing the details shortly.

I saw that and wrote a post for my outside blog that will appear on Friday.  Great idea to publish the info on ActiveRain.

I have a document issued by HUD about this very thing...I can forward it to you via email if you wish. 

Essentially, applicants must secure bridge financing (short term) to cover the $8K down and then repay the loan with the $8K at closing.  At lease, thats my understanding of the document.

clint aka @recr

Cool....it is a step into the right direction and great news for buyers.

Bettina

That may be great news especially if they extend the period of the rebate.  I hope they do

Missy - What great news for our buyers!  Thank you for sharing!

Nice thing to hear - it seems that people are trying to help - let's give them some time to dot the "i's" and cross the "t's"   - It could be good for many buyers who want to save some $ for fixing up the house.  Good news!

I have to comment again. Is that the confederate flag that is being sewed in your picture? If it is, does this mean the south shall rise again?

Hi Missy!

I think this can be a great thing, but it will be interesting to see how it turns out. I have about 3 buyers right now that would love to use the credit now. 

-Lisa

Hi Missy ! You must be busy ! I havent seen you on here in a while :o)

This is indeed a great incentive, and I have actually had a contact USE THIS ALREADY !!!!!

... I will be writing a blog about it tonight to give the example, and it will show the gentleman above that this is actually NOT speculation but is available right now :o)

Hope you and the family are well Missy !

Cheers :o)

Sheldon

This is hitting the e-mail circuit and blogoshpere big time.  I can hardly wait for the phone calls from 1st time buyers wanting to use the $8,000 for their down payment.

Thanks!!!

Misty, This is great news.  Just came back in from a Kentucky Housing Seminar that discussed this very subject, using "Mortgage Credit Certificates."  Very helpful info to share!

I'd heard whispers about this proposal and it's nice to see it in print.  Let's hope they get the details ironed out asap.

Missy,

I sent the NAR link to a lender friend and he shot back this email. Thought it gave a another perspective.

"I got this earlier this am and I had to read it twice!

When I got to the part where lenders will have to write a "bridge" Loan for the $8000. I almost fell off my chair laughing hysterically.

 There is no way that this is going to happen... is Shaun Donovan for real???  This guy is a Harvard grad with a master's in public administration architecture and has no business being the secretary for housing...

 This guy is dreaming... I don't know what kind of convoluted schemes they pulled in new York when he was secretary for urban development there

But it's not going to work in the free market ... OK SO  you're going to give the 8k as a down payment great!!!. Then let the feds give it out ...   Why make LENDERS GIVE A BRIDGE LOAN on the premise that the borrower is guaranteed the 8k back?  How is the lender or the borrower for that matter going to be sure what their tax liability is to ensure that they are going to get the full 8k back in the form of a refund...  this will cause chaos and confusion and will result in more bad debt , and the worst kind... the kind that is unsecured...

This guy is an idiot

I say ...  Good intentions,... bad presentation...

"GUARDS..... SEIZE HIM !!!!!!!!"

Here is an email that I just received from one of my favorite lenders:

Hi Tim,

We have just been informed that this is a bridge loan that can be done only by Government agencies or non-profit companies.  Therefore, unless we have an agency in our area that will make these loans, it is useless to us at this point.

Sorry for the bad news.

Missy,

I too called a local lender this morning.  Her response, "Who is going to make that bridge loan?"

Well, I guess we'll have to cross that BRIDGE when we get to it.  (Sorry I couldn't resist)

Missy.... this is great news and not so great news.  I already had another blog in mind for tonight, so I will be writing about this tomorrow. Ken Cook, in his comment, kind of dissected it a little more... and then I read one of your comments. I will say this, I didn't read your link to NAR announcing this, but I think they were immature in doing so. This is not a done deal at the stretch of any imagination.  There are more details to work out from the lenders and non-profits.

Overall, the bottom line is that HUD announced mortgagee letter 2009-15 2 days ago, basically stating that lenders can allow for short term or bridge loans to be held by the lender, to be given to the borrower as moneys to be applied towards down payment and closing costs, on behalf of the tax credit. .. or this can be given from other non-profits.  This just came out and I know of no lenders giving 2nds yet. And keep in mind, this will mean their own money...  how does the lender get this 2nd back? Does it go from the IRS to the borrower to the lender?  Does it go directly from the IRS to the lender, so they can pay off the 2nd?  None of this is clear. All HUD  did was give the okay... it's up to the rest to make this happen.

On another note, some people mentioned in comments that this already takes place with certain states, and that Florida will be joining soon. Ah, sounds great and too easy, right?  It's not...  since it's controlled by the state, you have to do a state mortgage / state bond program, in order to obtain this money. Yes, some lenders are signed up with the state to do this..  But... two negatives... you have to adhere to the state bond requirements, which many also have income and ratio restrictions.  The lenders generally make a lot less money on it and sometimes more work. And lastly, a good example.. the state bond rate right now is like 6.125% in GA.  In NJ and a few other states, it's 5.5% or 6%.  Well, rates are from 4.5% to 5.0%.  So not only could you have a higher rate, but you will have to pay a fee in some cases for the 2nd.

Yes, you get to buy your house with hardly any money...  sure, you could refinance in 6 months.. BUT... it costs more money to refinance and rates could go up.  Just food for thought.  thanks

PS... and with some lenders such as Wells Fargo and B of A, that are telling buyers and people refinancing that it could take 45 to 60 days, even longer to close... do you think they would go out of their way to create second mortgages to allow this to happen, which then would push closings from 60 to 90 days, because of increased volume?  How do you sell this to your seller?  What if rates go up in 45 days, .. lock-ins for 60 to 90 days are more expensive... again, just more food for thought.

Great information.  It's time for this-a move in the right direction.  There is so much mis-understanding about this tax credit.  (from Realtors and buyers alike) Thanks for the post.

LOL @ Brenda.

Belonger: Did you even read the Mortgagee Letter?

*ducking*

HUD has rescinded that Mortgagee Letter.

Something is up!

I knew there would be some interesting comments here about the down-payment announcement.

Great idea Missy and good reason for a blog...

Great idea Missy and good reason for a blog...

Tom Burris is on to something folks and the devil will again hide in the details of this. Although it's very good that HUD is trying to facilitate the leveraging of the tax credit, it remains to be seen how that will happen.

Anyone up for paying Nehemiah or Ameridream a token "administration fee" to make this work?

Let's see what the next annoucement brings...

Gerry Suarez, Jr.

Your FHA Loan Pro!

I'd like to know the full story of the rescission of Mortgagee Letter 2009-15.

Tom's right---something is up!

Guys, it is obvious something is up. But, not only did i get an email this AM from NAR, but Michigan Association of Realtors also sent out an announcement. I agree if this is false shame on HUD for posting it on their site which I copied from the comment above.

I am a bit indifferent to this but my "complaint" is that the rules keep changing, doesn't anybody in Washington think anything through before they pass legislation in the first place?

Why then did we get rid of DPA last year? :)

Missy - per your request, here is a link to my post that shows an example of someone who has ALREADY used the program you posted about :o)

$8-000-first-time-buyer-tax-credit-now-yes-you-can-here-are-the-guidelines-of-how-my-contact-got-it-last-week-

I am glad others have addressed the bridge loan issue.  Trust me, I looked for lenders who would be able to adhere to the guidelines.  There will be rate hits on first and seconds - as much as allowed by FHA I am sure.  That would be IF I could find someone who could do these ;)

What absolutely blows my mind is that the powers have been pretty silent about these incentives, yet they have spent millions advertising the disaster ahead called HDTV. Millions advertising. Millions for coupons to buy a convertor. Amazing. 

Awesome news that will make a huge difference for a lot of first time homebuyers.  It is a shame this is not being well-publicized yet, hopefully that will change.   Thanks for your post.

Ok, Here's what we need to do:

Write our Senators and Congressional Represenatives to make them understand that this won't do any good unless:

1. The lender that is doing this loan cannot structure it to make it unattractive to a first time homebuyer (eg. load fees onto it)

1a.  There MUST be a funding mechanism for this to work... and we all know that lenders don't work for free.  Why can't HUD or the IRS fund this at the closing table?  It's the governments money (ie. TAX credit)  We all know that ultimately the IRS will be cutting a check why mess with it twice?

2. The programs to implement this process need to be rolled out quickly.  The credit currently is slated to disappear on December first.  That means they cannot figure it out in September.

3. Consider the possiblity of rolling it out quickly AND extending the tax break.

For those that have not yet done so, go to the NAR web site and read the details.  They are out there front and center.

I have also blogged about this, after reading it on REALTOR.org yesterday. And now my nephew is excited about the possibility of buying a house, as is his best friend. There will be some very unhappy folks in Cleveland if I've jumped the gun!

Thanks for posting...and thanks for all the informative comments above on the pitfalls. I'll stay tuned for the details. It sure could help one particular situation I am facing now. Appreciate your time!!

The good, the bad, and the ugly.  Guess we will just have to wait and see how it all pans out in the coming weeks.  It would be huge if "someone" figured out how the buyers could use this as a down-payment easily.  Massive jumping off the fence!

Missy - I'll definitely be interested to see the follow-up.  Kentucky just announced a program offering first-time home buyers a $4500 second loan towards closing costs and down payment money.  As Jeff alluded above, there are income and lender restrictions.  However, the rate is 6% with P&I deferred to a starting date of July 1, 2010.  Buyers who pay the loan off early (with their $8000 tax credit perhaps) will get $300 forgiven. 

Missy.. I don't think it's false shame for HUD posting this on their web site.... I think it's false shame on NAR and others like the Michigan Association of Realtors for posting this stuff without understand 100% on how this works. Now, I am just assuming this, but by what they have said and blogs such as yours and Sheldon Neal, some things are twisted and misinformed. The bottom line is that you can't use the money for the down payment. Downpayment is not defined. By HUD's guidelines, buyers need 3.5% of their own money, which can come from gift monies from family members, or non-profit organizations. A bridge loan? That is from a lending institution and doesn't follow HUD's guidelines of the down payment. People need to read the mortgagee letter, ML 2009-15. Here are two quick excerpts that I wanted to point out to others from the HUD mortgagee letter - ML 2009-15.

<>

The Tax Credit:  Secondary Financing:  

Entities that can offer tax credit advances with second liens.

• Federal, state, and local governmental agencies and nonprofit instrumentalities of government.

FHA-approved nonprofits.

AND

<>

The Tax Credit: Short-Term Loan: 

Entities that can offer the tax credit advance with short-term loans:

• Federal, state, and local governmental agencies and nonprofit instrumentalities of government, FHA-approved nonprofits, and FHA-approved mortgagees may provide short-term or “bridge loans” secured only by the anticipated tax credit due the homebuyer as collateral.

Overall, there are more specifics in the mortgagee letter... but to make this sound like it's a down payment loan?  Please read this quick blog by Ken Cook : False info about the first time buyer's credit as the down payment.  And Missy, I am not trying to rain on your parade. You just went off of what the NAR said and others...  but so many have jumped the gun on this.

@ Erik... he partially makes my point. That program, even though through the state, is in accordance with non-profit or gov't agencies. They are not a lender....  that is the difference and that money can be used for the downpayment. But people are just throwing down payment around.  It's not being defined correctly.  Just my .02. thanks

@ Jeff - I read the NAR article after I read Missy's post and the ensuing comments.  I certainly see where the confusion comes from.  In the opening paragraph, Ms Trupo states "the
Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a downpayment."  Sounds like Case Closed, Done Deal, Break out the Champagne!  Further down, the picture gets a little muddied as qualifiers like "we want to do..." and "start a dialogue" seem to indicate this is just someone's idea.  I don't get to write this next part very often..... Kentucky is clearly ahead of most of the rest of the nation in addressing the down payment issue.  The law was targeted to solve this situation and has clearly defined rates, repayment conditions, etc. 

As if loans are not difficult enough right now to get done in a timely matter, even for the most qualified buyers...then offer something that could be so wonderful, but yet complicate it and make it probably costly as well! It is very disheartening because I know many that would benefit from the $8,000. help. I read the posts that were negative about using this as a down payment and referenced the cause of the foreclosures and I really don't see this as being the case, houses are now affordable again in my area, with average rents running $1100. - $1400.(equal to a house payment) and they are actually houses for sale in the $200,000. or less range (first time in many years), 100% financing is not what killed the housing market, interest onlyand ARM's were the largest culprit in my opinion and then there was the glutton on house prices! I really hope they work out a simple solution to letting buyers use this money and Missy thanks for the post, it seems to have caused a stir but at least it got out there to all of us...the pro's and the cons's.

THis is great news. You're right, it will be interesting to see what interest rates, etc. they will tack onto this bridge loan. It would be great if they would use it like the DPA program we had with Ameridream and Nehemiah. Thank you for posting this information.

Missey - I'm not sure how this improves the situation much.  The IRS already has special election rules that allow you to claim the 2009 tax credit on your 2008 return.  In all honesty, this may be much to do amount nothing.  In Missouri, MHDC already offers a tax credit advance loan.  The only possible benefit to Missourians would seem to be that it expands the organization that offer this type of loan program to include FHA lenders who don't participate in the MHDC program and not for profits such as Beyond Housing.  More importantly, there aren't any lenders that have any guidelines out so I wouldn't expect an immediate change in the available loan programs.  This is my take on it - it may or may not be correct.

well it gives a little hope to first time buyer's anyway. Hopefully the plan will unfold with favorable results. I was glad to see this news today.

I, for one, am hoping that this becomes a reality. I can't imagine how all the details will be worked out but what a great deal it will be for first time homebuyers.

I saw this notice as well and think it is a fantastic change that can only help the markets around the country recover quickly.

I have mixed emotions about this.  As a Realtor, I am happy because it will bring me more business and make things easier on my buyers.  I do agree that, as others have mentioned, Congress is going to need to extend the deadline however to make a difference in the housing market.

My question, though, is that since many people agree that part of the reason we got into this housing mess in the first place was due to many people taking out 100% loans that they could not really afford...aren't we in a way doing the same thing now?  If we make buyers not come out of pocket at all for closing costs, and give them nearly 97% loans - they still will have very little equity in their homes.  Granted, if they buy now we are supposedly near the "bottom" of the market if some experts are right, and maybe the market will go back up and their equity will increase - but its still a gamble.  But part of me agrees with the generation that used to put 10-20% down on a home...  My generation doesn't really know how to save money very well and I think, at least in some small part, that plays a role in how people have found themselves in an economic mess. 

Thanks for pointing this. I saw this on Inman, but because I dont have the Premium membership, I cant read that article in its entirety. I'm glad you pointed it out.

If it is a loan, I'm not sure if I'd be too interested. If it trul come from the Feds, then why dont gift it, credit it right away. Instead of having people do the bridge loan, just do it right away. Or amend the 2008 taxes, wait for it to come back in a few weeks, then use that $8K on fixing the house - if that's truly what it is meant for.

People must show their ability to acquire at least the 3.5% down. I completely agree on that part.

I was really hoping that the $15K credit would apply to ALL homebuyers, not just first time home buyers. Now, we really get the housing market pick back up.

Long thread, so forgive me if this has been mentioned already, but we've been doing this from day one.  The money is the consumers.  It would not be any different had they used their tax refund, which this is asically the same.  Furthermore, if they have not filed taxes yet, they can obtain the funds prior to closing by submitting a copy of the sales agreement with the tax filing...hope this helps.  JMW

It seems like a good idea, I would dissect it carefully like Jeff did above.

According to an internal email from one of my lenders:

You may have noticed that the Mortgagee Letter 2009-15 has been removed from the HUD website.   While we are not sure why the letter was removed, we believe you should proceed cautiously until the letter is re-posted.

RE-itterating what Michael just said....this program is now dead. Or, at least that is what I hear from sources at Midyear.  Although it MIGHT still happen...the letter was removed from the website and the program, in its initial form, is not available.

Has anybody seen this?

http://memphisdailynews.com/editorial/Article.aspx?id=42421

It looks like they are the first to start this program, and the article says it has been approved by HUD. Also, there is a $500 service fee attached to the loan. It will be interesting to see if this plays out as advertised.

Anybody in Memphis on here who knows of this and can comment?

I had posted this link on my blog for the HUD Mortgagee Letter 2009-15, and it still seems to work as a download, not sure why:

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-15ml

I believe approving loans to buyer's that didn't deserve a loan is more to the point of what caused the foreclosures. I may be naive, but I believe that a consumer that is concerned about their credit, that pay his bills on time, therefore has a good credit score, when that consumer buys a home. They will not allow themselves to take on more (monthly PITI) than they can handle, WITH CUSHION. I'm not saying there are not exceptions, but in general, I believe those with good credit still have their good credit and their home. 

I think it is great for the 1st time buyer. I haven't seen it at the closing table yet. I wish they would extend it to all home buyers. I know that would help us here in Michigan.

Running some fast numbers.

$8000 equates to 5% on a $160,000 house, and 3.5% of $228K.   Plus if you can get the seller or REO bank to pick up the closing costs you can have a FTHB get into a house with no money down.

Great...  another 100% financing arrangement... they've worked so well in the past.

(can you see my eye's rolling around in my head?)  

Please.. no comments about me being a "glass half empty" type of person, I don't believe in problems being solved by doing more of the same things that got you into the problem in the first place.

The letter has been taken down on the web site and VAR website has said they have retracted or put this on hold.

Should never have been sent out my NAR or MAR.

I hate to tell you this but my GMAC rep said HUD withdrew this    

And now I just saw this on Realtor.org web site:

Many States Already Monetizing Tax Credit

If this program has been withdrawn, how are these states implementing this, and what other states besides Washington are involved? The article says there are 10 states but doesn't list them.

First it wasn't the 100% loans that sent us down the road we are on. I believe it was how buyers where being qualified with teaser interest rates then rates ballooning out. Then once ballooned the buyer having a hard time with the payment and in most cases giving it a great try but loosing the battle in the end (foreclosure)..

Anyway back to the point. Many people don't have or can't get to savings. However,  that doesn't mean they can't afford a mortgage, taxes and insurance payment. So with this news it would have or could have helped a lot of people. And as far as helping, it would have helped more then just the buyer....

I really hope this or a program like this is put into place and soon...

Hi Missy,

Thank you for your post. I will use this with my buyers.

Jerry Gray CRB,CRS / Prudential Carolinas Realty / Winston Salem, NC

Missy--I didn't read this yesterday but was at a continuing ed class today and this was being discussed. Good for you for putting the corrected information out as soon as you heard...Lots of misinformed people out there based on what was said yesterday.

I suppose we have all heard by now that it was all a part of "push-pull" that is developing in this crazy $8,000 tax credit business.  Too bad we aren't going to get to use it as a down payment after all.  That darned Mortagee Letter 2009-15 was withdrawn.  I'm going fishing!

By the time they get this sorted out, the December 1st expiration of the tax credit will have passed.  It is withdrawn and with the backlash on 100% financing and "seller funded DPA", I doubt this plan will pass.

It can be done right... just look at USDA and VA that are 100%.  But it needs to be carefully weighed with attention to credit, income and reserves.

I've been thinking that something like this would make a lot of sense.  Hopefully it will be helpful for many first time buyers.

Since so many of the predatory lenders have gone belly-up, and the rules have been severely tightened on the balance, I don't know why this plan could not work if the buyer was fully and carefully underwritten.  A world of people have good credit, but not much cash.  It still costs a lot to move and set up a house, so they would have to have something put away for that closing day.

That's good news.  I missed that announcement since I was on vacation.  I am flying home as I write this.  Too bad I am not a first time homebuyer.  I could use it right now.  My husband relocated to a new city for a job and we are trying to find him a little crash place. Won't it be nice if there was some benefit for us too?  Like the investor who benefits with incentives, why not those who can afford a second home?

Thus far there are no changes from Secreatry Donovan's comments at the Real Estate Summit as per Miami HUD Public Affairs.

http://activerain.com/blogsview/1081003/fact-or-fiction-8-000-first-time-home-buyer-tax-credit-used-for-down-payment

Missy, thank you for sharing this valuable piece of information.