$8,000 Home Buyer Tax Credit Can Be Used Towards Closing Costs!

Chicagoland Real Estate Forum has learned today that during a special session held during the NAHB’s Spring Board of Directors’ Meeting in Washington, HUD Secretary Shaun Donovan outlined the “Making Homes Affordable” plan to get single family housing market moving.

In addressing the current issues facing the housing industry, the long awaited “Mortgagee Letter” released details of how the $8,000 home buyer tax credit can be used towards first-time buyer’s closing costs at closing.  Specifics contained in the mortgagee letter include the ability of borrowers to immediately apply the funds to their downpayment or for homebuyers to use the federal tax credit for non HUD products, pay upfront interest products, or use for downpayments above 3.5%.  The announced flexibility in the tax credit advance the money needed at closing instead of after the 2009 income tax year.

Also outlined in the session is the assistance for families in danger of losing their home have the ability to aggressively modify their loans via cooperation with Fannie Mae and Freddie Mac.  Because of these efforts tens of thousands of Americans will now be able to buy a new home and hopefully many more will be able to stay in their existing homes.