$8,000 First Time Homebuyer Tax Credit Can Soon Be Used Toward Down Payment!
NEW INITIATIVE BY HUD SECRETARY WOULD ALLOW FIRST-TIME BUYERS TO "MONETIZE" THEIR TAX CREDIT AT CLOSING!
Shortly after the Obama Administration took office last January, one of their first initiatives was to hasten the turnaround of the sluggish U.S. Housing Market. One tool to do that - an $8,000 credit, directly applied to Federal Income Taxes due, for any first-time homebuyer who closes on his new home before December 1, 2009.
Interest in the program has generally been spotty, however.
Now, under a new proposal by Shaun Donovan, U.S. Secretary of Housing and Urban Development (HUD), lenders may soon be able to allow first time homebuyers access to the Tax Credit right away. Under the proposed process, eligible homebuyers would receive a short-term bridge loan at closing, to be immediately repaid when the $8,000 Federal Tax Credit is taken at the time the buyer's tax return is filed for the 2009 tax year, in 2010.
Donovan made his remarks earlier this week at the National Association of Realtors Mid-Year Legislative Meetings in Washington DC. See the May 12th National Association of Realtors Press Release from Mary Trupo for more information.
In the experience of our Team, many of our new First Time Buyer Clients have heard of the tax credit, but are confused by its provisions, and don't feel an Income Tax Credit next year will be a strong enough incentive to get them to buy now. Perhaps monetizing the credit, as proposed by Secretary Donovan, will spur many to act with greater speed.
DEAN MOSS & DEAN'S TEAM CHICAGO
