Mayfest Chicago

The good news the National Association of Realtors was clamoring for came in the form of an announcement from Shaun Donovan of the U.S. Department of Housing and Urban Development (HUD). The association’s website reports that the FHA has given the green light to lenders for a change in the real estate down payment rules.

The National Association of Realtors states that the $8,000 tax credit that home buyers would normally be able to apply for during their tax preparation may now actually be applied toward the down payment of the real estate purchase. A specially designed loan vehicle “pays forward” the tax credit and thus the real estate buyer borrows the funds for the down payment.

In the past, the use of borrowed funds for a real estate transaction was considered an unacceptable practice. Today, it might be the little extra nudge otherwise qualified real estate buyers require to make their dream of homeownership a reality.

First Time Homebuyer Tax Credit as Real Estate Down Payment is Not a New Idea

The US News Home Front Blog reported that already in January of this year, the state of Missouri was allowing the first time homebuyer tax credit to be turned into a down payment on a piece of real estate. The Missouri Housing Development Commission (MHDC) discovered a way of writing a second loan of up to 6% of the home purchase price, which would then later on be paid off with the first time homebuyer tax credit that is valued at 10% of the purchase price.

Consumers who repay the down payment loan will not be charged interest but instead only a processing fee. Those who fail to repay when they receive the first time homebuyer tax credit see their down payment loan funneled into a 10 year loan that is repaid - with interest - over a decade.

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Visit us online, in person, or call us today to get pre-qualified today!

American Street Mortgage Company
837 North Milwaukee Avenue
Chicago, Illinois 60642
(312) 376-3760 Phone
(312) 376-3761 Fax
www.AmericanStreet.com
www.AmericanStreetBlog.com

1. Once the you have an executed contract on a property you wish to purchase, schedule an appointment with your CPA to file an amended tax return.

2. You will need to complete the new 5405 form which is specifically designated for this tax credit. The CPA completes this form and sends to the IRS.

3. The funds will then be wired to your bank account within 7-12 business days, and can then be sourced as verification of down payment funds. Every lender allows a buyer to use a tax refund for a down payment.

Contact Your Mortgage Planner Today!

Sharbel Shamoon
Vice President of Operations

Bernie Ockrim
Vice President of Senior Lending

Daniel Chookaszian
Vice President of Veteran Lending

Justin Lopatin
First Home Buyer Specialist

Winnie Uluocha
FHA 203(k) Rehab Lending Specialist

Jeremy Storino
FHA Streamline Specialist

Steven Bote
Mortgage Planner

Angel Arzet
Mortgage Planner

Juan P. Rodriguez
Mortgage Planner

Patti McDonald Realtor 773-604-7111x231 Mak Realty Group, Inc.