Tax credits can help many buyers, including first-timers, get better loan terms and more easily affordable mortgages. The change is in line with the government’s goal of reviving consumer credit, which will help the U.S. economy back on its feet.
In a recent development to boost mortgage market Federal Housing Administration(FHA) announced that homeowners can use their $8000 tax credit as down payment for mortgage loans.
This step of FHA would be a big win-win situation for the mortgage market and it would allow many more people to move into a new houses who currently may not have credit to pay as a down payment.
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development announced this development at the Real Estate Summit Washington which was attended by several thousand realtors. Shaun added that HUD sha ll considerfurther changes proposed by the National Association of Realtors (NAR).
Shaun believes that the housing market has shown good signs of stablisation and this will certainly stablise in near future. He added that home sales are now stable and the devaluation of property has slowed down.
This step of FHA will enable their consumers to use their tax credit funds as a downpayments when they close on their home loans. So Federal Housing Administration will permit their lends and HUD approved non-proits, state and local government entities to monetize the tax credit through short term bridge loans.
We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit.
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