Mortgage Market Update - Much Ado about Nothing - Tax Credit and Pown Payment

By
Real Estate Mortgage Broker with Premier Capital Mortgage

 

 


Earlier today I sent out the message that the New HUD guideline was released on the tax credit being used to purchase a home.  Below is the message that was released.

Just out this morning HUD mortgagee letter 2009-15 is now out.  FHA is now providing the guidance to help homeowners utilize the tax credit to purchase the home - thus not waiting to obtain the funds after the closing. 

Please note there are more guidelines to follow and I am sure some lenders may have their own set of rules in place once they are able to interpret this mortgagee letter.
 

To be very clear on something that was not explicit in the previous message.  The Funds from the tax credit may not be used for the down payment.  The excerpt below from ML 2009-15

•·         Pursuant to 12 U.S.C. 1709(b)(9), the homebuyer's downpayment required for eligibility for FHA insurance may not consist of any funds (including funds derived from a sale of the homebuyer tax credit) provided by the mortgagee, the seller, or any other person or entity that financially benefits from the transaction (or by any third party or entity that is reimbursed, directly or indirectly, by the financially benefiting person or entity).  Accordingly, the proceeds of the sale of the tax credit to FHA approved mortgagees, the seller, or any other person or entity that financially benefits from the transaction (or any third party or entity that is reimbursed, directly or indirectly, by the financing benefiting person or entity), may not be used to meet the 3.5% minimum downpayment, but may be used as additional downpayment, buying down of interest rate, or other closing costs.

 

 

  For an in depth explanation and daily update click on The Daily Rate Lock Advisory. 


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Joe Farro
Premier Capital Mortgage
(678)289-6600
(800)613-0650


 

 

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Topic:
Real Estate Sales and Marketing
Location:
Georgia
Groups:
Realtors®
Tags:
fha
first time home buyer tax credit
first time homebuyer
down payment assistance

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