After a false start, details of the new program that allows homeowners to use the first time homebuyer tax credit at closing have finally been released here. Below are the major points:
The program can only be used or FHA-insured loans. VA, conventional, and other programs are not included.
The credit cannot be used towards the required 3.5% down payment. Closing costs, mortgage discount/origination point(s), and other closing costs can be covered by the credit.
So while you cannot get your home of no money out of pocket, you can use the credit to “buy down” your mortgage interest rate and/or possibly negotiate a lower price on your home by minimizing the amount of money you would have to ask for from the seller for closing cost assistance.
Comments