So the $8,000 Tax Credit Can Be Used on Closing Costs

HUD is really having a difficult time figuring this one out and have flipped flopped over whether or not bridge loans can be used for the $8,000 tax credit. It looks like they have decided now that they can be used, as long as the buyer still puts down 3.5% of their own funds for down payment on FHA loans.

• REALTOR® Magazine-Daily News-HUD: Tax Credit Can Be Used on Closing Costs

  • HUD: Tax Credit Can Be Used on Closing Costs
    FHA-approved lenders received the go-ahead to develop bridge-loan products that enable first-time buyers to use the benefits of the federal tax credit upfront, according to eagerly awaited guidance from the U.S. Department of Housing and Urban Development on so-called home buyer tax credit loans that was released today.
    
    Under the guidance, FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent.

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