The official announcement of the 8000 tax credit monetization plan has been released and now official in the form of a Mortgagee Letter from HUD. This monetization plan will help people gain access to the 8000 tax credit for new home buyers immediately where they can use it for closing costs or even part of their down payment.
According to Reuters:
The National Association of Home Builders estimates that the $8,000 first-time homebuyer credit will stimulate 160,000 home sales across the United States — 101,000 purchases from first-time buyers and another 59,000 purchases by existing homeowners who sold dwellings to first-time buyers.
While it is not exactly clear how many new home buyers in Arizona will take advantage of the monetization plan, a couple of the more common questions about the plan include:
Can You Use The Tax Credit For Your Down Payment?
Yes, — but you cannot use the tax credit to cover the first 3.5% of your down payment, you must come up with that on your own or have it gifted to you from a blood relative.
Once you come up with the initial 3.5% down payment that is required by FHA, if you would like to use the 8000 tax credit to add to that down payment, that is allowed.
How Much Does It Cost To Get “Monetize” The Tax Credit?
The costs to monetize the 8000 tax credit are pretty reasonable because HUD has given specific guidance regarding any fees charged. According to the Mortgagee Letter:
Any costs attendant to the purchase of the tax credit are to be nominal and discounting the anticipated credit to cover the costs and expenses of the transaction must be reasonable and disclosed to the homebuyer. In FHA’s view, fees and costs that total more than 2.5% of the anticipated credit are considered excessive. (Example: $6000 to be refunded, with all fees and costs discounted, borrower should receive not less than $5850.00 for sale of tax credit.)
There is no doubt that you may still have questions about the rules set up to monetize the 8000 tax credit when you are looking for a home in Arizona – so here are just a few other resources that we have found:
Official Mortgagee Letter 2009-15
New Home Buyer 8000 Tax Credit Down Payment: Answers To Questions
8000 Tax Credit Questions and Answers
Tax Credit Monetization Rules For Down Payment and Closing Costs
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