Bellingham Real Estate Tax Credit – If you are Confused You aren’t Alone

Mr Coyote is confused. I bet you may be as well.

It wasn’t so many weeks ago that HUD Secretary Donovan made it official. FHA will allow homebuyers to apply the Obama $8000 1st time home buyer tax credit toward the costs associated with purchasing a home. Prior to this decision, the credit could only be accessed after the fact ie: by filing their tax return with the IRS. So the question then becomes “Okay so how do I get the money?”

A couple of weeks ago, a VP of Residential Lending spoke at our sales meeting. The topic was actually “Short Sales” however hte question came up about “Okay so how do I get the money for the tax credit to use against my downpayment and / or closing costs?’ The speaker said quite frankly that he didn’t know. Their bank which is not a small institution by any means had only done one residential loan with the Buyer using $8000.00 for his / her downpayment and that $8000.00 came from a private lender.

It turns out that Department of Housing and Urban Development (HUD) said it would permit FHA-approved mortgage lenders to offer eligible borrowers an advance based on the tax credit. Additionally, some state housing finance agencies have introduced programs that provide short-term loans that may be used to fund a downpayment. Prospective home buyers should inquire with their state housing finance agency to determine the availability of such a program in their community. These opportunities are currently available in the States of Colorado, Delaware, Idaho, Kentucky, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania & Tenessee. Presumably, other States will be added to this list but for the time being this is it. A resource for this information is the National Council of State Housing Agencies

If you have experience with this credit, please share your thoughts here.  We can all benefit from each others experience.

For more information on Bellingham Real Estate or to search for homes in the Bellingham and Whatcom County area visit www.JohnsonTeamRealEstate.com, your one stop Bellingham real estate and community information resource!