With HUD’s new announcement that the First-Time home buyer’s tax can be used toward (and at the time of) the purchase of a home has misled many. The money may be used for closing costs or ADDITIONAL downpayment beyond the required 3.5%. This simply translates to- HUD wants the buyer to have some of their cash in the home purchase… No more 100% financing. But there is need for clarification… If you read the prior blog entry, which is a direct quote from FHA/HUD, in one paragraph it states it can be used for the down payment but further in the announcement, it reads “Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA’s new mortgagee letter, visit HUD’s website.”
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