Saturday, June 06, 2009

Tax Credit For Downpayment?

We have heard about this (see May 14 post) coming but there are no specifics yet. FHA/HUD has to agree that certain lenders can loan you the money you would get as tax credit/refund. They need to work out those very tough details. And the current state of affairs with lenders due to their "new rules" about market value and underwriting have created enormous work flow issues.
A client recently figured out he could do it faster and cheaper if his grandma would loan him the $8000 (FHA is OK with that) and immediately after closing amend last year's tax return and get the credit refunded, they say within 12-16 weeks. So in 4 months he can pay back grandma. If you would like to talk further about this, let me know.
Also news: If a buyer has owned a "NON-PRINCIPLE RESIDENCE" like a rental property, but has not lived in it as a principle residence for the last 3 years, they may qualify for the TAX CREDIT as well. I just got this from a loan officer who is working with some clients in this situation and she tells me it is CPA approved. Check with your CPA.

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