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Believe the hype: There may never be a better time for first-time home buyers to buy a house.

Tax Credit Bridge Loans

Earlier this year the federal government announced an $8,000 tax credit for first time home buyers. But this incentive just got better when HUD secretary Shaun Donovan announced plans last week to turn that tax credit into cash to help home buyers with their down payment.

In a speech addressed to the Realtors Midyear Legislative Meeting in Washington, Secretary Donovan said that monetizing the Tax Credit will allow thousands of consumers to buy a home.

“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan said.

While details have yet to be released, the plan is to permit FHA-approved lenders to provide short-term bridge loans, allowing eligible home buyers to access the their tax credit funds at closing instead of waiting for the tax return season in 2010. This money will help cover closing costs and down payments, perhaps the last hurdle for some would-be home owners.

Details of the plan should be made clear in the next few weeks, and we’ll report them as soon as they become available. This is undoubtedly fantastic news for first-time buyers. It’s almost like the money to buy a house is being handed over!

Affordable Housing

And as if that’s not enough, yesterday the Housing Opportunity Index reported the most affordable housing market in its 18-year history. Slower home sales, increased home inventories, and a sluggish economy all combine to create a continual trend in downward housing prices.

Lowest Rates in History

Increased affordability is highlighted by record low interest rates on mortgages. Rates continue to be the lowest they have been in decades, also influenced by the languishing economy.

When the economy begins to show clear signs of improvement, rates are guaranteed to rise. So the silver lining to the poor economy is the fantastic home buying opportunities that abound.

Bottom line, if you’ve been on the fence, now is the time to jump off!

Related Info

• Tips for Home Selling
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• Find out which home loan mortgage is right for you, from a 30-year fixed FHA loan to a VA Loans.

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