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May 13, 2009 - HUD Secretary
Shaun Donovan’s decision to allow consumers to
use the $8,000 first-time home buyer tax credit
to help cover their downpayment and closing
costs on FHA-insured mortgages will be a big
boost to the housing market, according to the
National Association of Home Builders (NAHB).
“The biggest obstacle for first-time buyers is
coming up with a downpayment,” said NAHB
Chairman Joe Robson, a home builder from Tulsa,
Okla. “We commend Secretary Donovan for acting
decisively to enable buyers to access the tax
credit at the time of closing. This will help to
stimulate home sales, stabilize housing and get
the economy back on track.”
The measures
announced by HUD would allow FHA-approved
lenders; federal, state and local government
agencies; and FHA-approved non-profit
organizations to supply home buyers short-term
or “bridge loans” up to the amount of the $8,000
first-time home buyer tax credit.
Longer term loans
secured by second liens can also be used by
government agencies and FHA-approved non-profit
organizations to facilitate home sales. Several
state housing finance agencies have introduced
such programs and a number of agencies are
considering that possibility.
Previously, the
home buye r would have been unable to access the
tax credit until they filed their next annual
tax return or an amended 2008 tax return and
received the refund from the IRS.
Robson and others
NAHB leaders discussed this matter and other
housing-related issues with Secretary Donovan
last week.
“Secretary Donovan
shares our view on the need for a housing and
economic recovery,” said Robson. “We appreciate
his leadership in moving swiftly to help
first-time home buyers to access the tax credit
up-front at the time of closing. The timing
could not have been better as we are in the
midst of the crucial spring home buying season.”
The next step is
to see how FHA-approved lenders use HUD’s new
guidelines to actually monetize the tax credit
for first-time home buyers and structure the
payback provisions o f the loans. NAHB
encourages lenders to act promptly to put these
provisions into place.
To qualify for the
tax credit, first-time home buyers must actually
close on their home purchase by Dec. 1, 2009.
Buyers can take the credit on their 2008 or 2009
income tax return.
For
further information about the tax credit –
including a detailed question and answer section
and a number of home-buying resources for
consumers – log on to NAHB’s consumer Web site
at
www.federalhousingtaxcredit.com.
A Spanish version is also available to provide
detailed information on the tax credit to
Spanish-speaking first-time home buyers.
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