Tax Credit for Your Down-Payment!

HUD has released information on the ability for First Time Home-buyers to monetize the tax credit. I encourage all buyers that this is a good thing but also encourage you to read further. Below is a link to the information posted on HUD’s Site.  The News Release published on the Hud site gives insight on how this will be done.

“Housing Finance Agencies and certain non-profits will be able to use the tax credit for their down-payments via secondary financing provided by the HFA or non-profit.”

The way that I read this is that corporations like Nehemiah was in the past for seller funded down payment assistance will provide Bridge Financing via a second lien for the down-payment. Upon the filing of the tax return with the IRS your debt will be paid in full with your Credit. If it is not a Non-profit like Nehemiah it may be the Housing Finance Agencies.

I am left with the following questions:

1. How much will the fee be to set up the secondary financing through the non-profits?
2. Who will pay the fee?
3. How will wholesalers factor this into the underwriting decision?
4. What is the actual process from A-Z to make this as seamless for the borrower as we can?
5. “HFA and certain non-profits” lead me to the question, Which ones?

I have several other questions that I hope will be answered in the coming days. If I have questions I am most certain that you do as well. I will work diligently to get the answers for you so that I may make this very simple and easy to understand. Have a great weekend.