HUD Secretary Talks Tax Credit Monetization

Posted by Orb Staff on May 13, 2009 No Comments
Categories : Residential Mortgage

ederal Housing Administration (FHA) will soon permit its lenders to allow homeowners to use their $8,000 tax credit as a down payment on a home, according to comments made by U.S. Department of Housing and Urban Development Secretary Shaun Donovan at a recent conference hosted by the National Association of Realtors (NAR). ‘We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,’ Donovan said. According to Donovan, the FHA's approved lenders will be permitted to ‘monetize’ the tax credit through short-term bridge loans. This process will allow eligible home buyers to access the funds immediately at the closing table. The housing market is showing early signs of stabilization, Donovan added. ‘Since January, we've seen home sales moving up and down around a relatively stable number, and we are seeing the first signs that the rapid decline in home prices is starting to abate,’ he said. SOUR

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