REDFIELD
REALTY
Laurie Stahl
Broker/Owner
Phone 605-472-2052
Its a great time to buy a home!

Interest rates are at their lowest in the past couple of years.  Purchasing a home is a great
investment and proven itself to be a safe secure way to build long term wealth.  
HUD: Tax Credit Can Be Used on Closing Costs
FHA-approved lenders received the go-ahead to develop bridge-loan products that
enable first-time buyers to use the benefits of the federal tax credit upfront, according to
eagerly awaited guidance from the U.S. Department of Housing and Urban Development
on so-called home buyer tax credit loans that was released today.

Under the guidance, FHA-approved lenders can develop bridge loans that home buyers
can use to help cover their closing costs, buy down their interest rate, or put down more
than the minimum 3.5 percent.

The loans can't be used to cover the minimum 3.5 percent, senior HUD officials told
reporters on a conference call Friday morning.

Thus, buyers applying for FHA-backed financing with an FHA-approved lender that offers a
bridge-loan program can get a bridge loan to bring down the upfront costs of buying a
home significantly but would still have to come up with the minimum 3.5 percent
downpayment.

There remain many sources of assistance for buyers needing help with the 3.5 percent
downpayment, including many state and local government instrumentalities and nonprofit
lenders.

In addition, some state housing finance agencies have developed their own tax credit
bridge loan programs, so buyers in states whose HFAs offer such programs can monetize
the tax credit upfront to cover all or part of their downpayment. These programs are
separate from what HUD announced today.

The first-time homebuyer tax credit was enacted last year--and improved upon earlier this
year--to help encourage households to enter the housing market while interest rates are
low and affordability is high. The credit is worth up to $8,000 and is available to
households that haven't owned a home in at least three years. The credit does not have
to be repaid, and is fully reimbursable, so households can get their credit returned to
them in the form of a payment.

Source: Robert Freedman, REALTOR® Magazine Online