On May 29, the Department of Housing and Urban Development announced that qualifying buyers can apply the $8,000 tax credit toward the purchase of a home. To facilitate the process, the Federal Housing Administration is permitting its lenders to extend short term bridge loans, which will enable qualifying buyers to apply their tax credit toward closing costs, buying down their interest rate, or increasing their down payment above the FHA required 3.5 percent.
"With an abundance of inventory, reduced home prices, historically low interest rates and now the availability of the tax credit at closing, we expect to see the housing market further stabilize and improve," said Charles McMillan, president of the National Association of REALTORS.
* 2009 home buyers can claim a special tax credit worth up to $8,000. The American Recovery and Reinvestment Act offers qualifying home buyers a tax credit equal to 10 percent of a home's purchase price, up to a maximum of $8,000. The tax credit is offered to first time buyers, and those who have not owned a principle residence in the past three years. To be eligible for the tax credit, buyers must meet general income requirements and close on their purchase before December 1, 2009. Please contact us for more details on this once-in-a-lifetime program.