HUD: Homebuyer Tax Credit Loans Still on Track

HUD: Homebuyer Tax Credit Loans Still on Track

News reports that the federal government is backing away from its plan to permit eligible borrowers to monetize the first-time homebuyer tax credit are off the mark, a spokesperson for the U.S. Department of Housing and Urban Development says.

Under the guidance that's under development, state agencies and other HUD-approved entities would be able to provide short-term bridge loans that households could use to help with their downpayment. The loans would be repaid with the proceeds from the households' federal tax credit.

The loans were announced on the opening day of NAR's 2009 Midyear Legislative Meetings in Washington, DC. In his announcement, HUD Secretary Shaun Donovan said guidance would be issued shortly. When the guidance is released, it is expected to cover eligible lenders and set parameters for loan terms and repayment.

Source: REALTOR® Magazine Online

This is all great news as it means that first time home buyers will potentially be able to use part of their tax credit as a downpayment.