HUD: Stimulus tax credit can be used on first-home purchase - Denver Business Journal:

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Under the American Recovery and Reinvestment Actof first-time homebuyers can qualify for the tax credi for purchasing their first home after filing their taxes. But underf a new program announced Friday, state housingv finance agencies and nonprofit groups can advance moneu to homebuyers up to the full amount of theirf tax credit so the moneuy can be used on a home either to pay closing costs or to add to adown "Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.
5 percent of appraisesd value or their closing costs, which can help achievd a lower interest rate," a HUD announcement "Families will now be able to applgy their anticipated tax credit toward their home purchase right away," Donovan said in the announcement. "At the same time we are putting safeguards in place to ensur e that consumers will be protected fromunscrupulous lenders. What we're doing today will not only help thesee families to purchase theier first home but will preseng an enormous benefit for communitieds struggling to deal with an oversupply of The stimulus tax credir can be claimed ona taxpayer'sw 2009 return, or throug h an amended 2008 return.
FHA will still require that homebuyers paya 3.5 percent down HUD cited National Association of Home Builders data showinvg that the first-time homebuyer tax credit will stimulate 160,000 home sales across the nation, with 101,000 of those saless being to first-time buyers and 59,0009 to existing homeowners who be able to sell their home to a first-timd buyer. .