Your Tax Credit At Closing Will Soon Be Turned Into Cash

In an effort to boost the real estate market nationwide, the Obama administration has put out the official statement:  First time home buyers nationwide will be able to turn their $8,000 federal tax credits into cash for use at closing.  However, there is one slight conditional statement, the $8,000 federal tax credit can only be turned to cash if and only if they first home buyer uses Federal Housing Administration (FHA) mortgage financing.

The guidelines for this loan requires first time home buyers to invest a minimum of 3.5% down in order to qualify for this loan.  In other words, this will not be a zero down plan and you will need equity in the house to participate.  As a first time home buyer, you will be able to pay for your entire down payment with the assistance of a bridge loan only if you obtain your FHA loan through one of the 10 state housing agencies who offer “tax credit monetization” programs.

These programs will allow you to use the $8,000 tax credit or whatever size tax credit amount you qualify for to any settlement fees you might have with your brokers, any escrow changes, or to pay more down so you can lower your monthly mortgage.  In other words, if you follow the rules, you may use this $8,000 tax credit in areas that will help in the long-run.

How to apply:

Must qualify as a first-time home buyer, meaning you cannot have owned a primary/prinicpal residence home during the last three years, and you household gross income cannot surpass $95,000 for single tax payers or $170,000 for married couples filing jointly.

Please contact our offices to get this process started.  We will help you wrie a contract on a house that you would like to buy and apply for a mortgage through an FHA approved bank.  We work with many local FHA approved lenders and not to mention that this something most first time buyers are not going to be aware of.

-Vic Parsekhian