$8,000 Federal Tax Credit Available at Closing Table

With the growing call for more flexibility for the $8,000 federal tax credit for first-time buyers, the U.S. Department of Housing and Urban Development (HUD) announced Tuesday that buyers may use the credit for the down payment at closing.  Pushing for change and easier accessibility to these funds before the November deadline approaches, The NATIONAL ASSOCIATION OF REALTORS® has been lobbying for this type of fix for awhile.  FHA’s approved lenders will be permitted to “monetize” the tax credit at the closing table through short-term bridge loans. Originally, buyers would not realize the tax credit until after filing for their federal income taxes in 2010, cutting out cash strapped buyers needing the funds for the down payment for buying a home.

Before thousands of real estate agents at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C., Donovan stressed the Obama Administration’s plans to further help stabilize the housing market. As the first quarter statistics of 2009 begin to show, there are many signs that values are stabilizing and transactions are picking up. The conference, “The Real Estate Summit: Advancing the U.S. Economy,” brought out a panel of experts including Jay Brinkman, chief economist for the Mortgage Bankers Association. Perhaps the biggest question for the mortgage business is what will the Federal Reserve’s exit strategy be now that it is the largest player in the market.