Shaun Donovan, Secretary of the U.S. Department of Housing and Urban Development, announced today that the Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a down payment.
He made these remarks in an address this morning at The Real Estate Summit: Advancing the U.S. Economy, a special daylong session at the Realtor's Midyear Legislative Meetings and Trade Expo in Washington D.C.
This may mean that the Washington Realtors and State legislature's plans to essentially do the same thing becomes a moot point. It actually makes for sense to do it on a federal level because funds from the tax credit will be coming from another federal agency, the IRS.
According to Donovan, the FHA's approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.This was the first announcement of this program and no other major detailed have been outlined yet.
Obviously much more to come on this subject.