Recession Foreclosures

Are you considering buying a new home? If so, there is truly no better time than now – particularly if you are a first time home buyer. Not only are housing prices at a record low, the First Time Home Buyer Credit will also provide you with up to $8,000 in tax credits when you purchase your new home. What could be better than receiving an $8,000 discount on your home purchase? How about this – the government is now allowing first time homebuyers to use the credit to make a down payment on the home of their dreams.

HUD Secretary Shaun Donovan recently deciding to allow first time homebuyers to use the $8,000 credit to help cover the down payment and other closing costs associated with purchasing a home – a decision that is being viewed as a victory for consumers by the National Association of Home Builders.

“The biggest obstacle for first-time buyers is coming up with a down payment,” said Joe Robson, who is the Chairman of the National Association of Home Builders as well as a builder in the city of Tulsa, Oklahoma. “We commend Secretary Donovan for acting decisively to enable buyers to access the tax credit at the time of closing. This will help to stimulate home sales, stabilize housing and get the economy back on track.”

In order to take advantage of the new First Time Home Buyer Credit rules, buyers must purchase their home through one of the following agencies or lenders:

• FHA-approved lender
• Federal, state and local government agency
• FHA-approved non-profit organization

Tax & Credit Refund

When purchasing a home through one of these agencies or lenders, you can receive a short-term loan referred to as a “bridge loan” of up to $8,000. The amount of the bridge loan will be dependent upon the selling price of the home so it will only be equivalent to the amount the buyer can expect to receive through the First Time Home Buyer Credit legislation.

In addition to being able to use the funds received through the First Time Home Buyer Credit as part of the down payment required to meet the FHA’s 3.5% minimum down payment, first time home buyers can also use the fund to buy down their interest rates at the time of the closing.

Additional details regarding the exact process of accessing the First Time Home Buyer Credit funds is are expected to be released next week. In the meantime, the announcement is one that is certain to get interested buyers to take the leap and purchase the homes they have been dreaming of.

Shane Pollock is part of the Greater Raleigh Realty Team, and is a resident of Cary, North Carolina. Greater Raleigh Realty specializes in Cary NC Real Estate and Relocation Services. For more information please visit our Greater Raleigh Real Estate website.