Just when you thought buying a home couldn’t be any easier, better, cooler or free-er, FHA comes back with arguably the best first time home buyer incentive in the history of, well, home buying.

The $8,000 federal tax credit for first-time home buyers is about to get better. To the tune of an $8,000 cash advance to use toward a down payment on a house.

Buyers who qualify for the tax credit and get an FHA loan will be able to get a bridge loan or a cash advance for the original amount of the tax credit they would qualify for. They can use this money toward their down payment, closing costs or other loan expenses. The technical term being used to describe the early liquidation of the tax credit is “monetize,” meaning to turn it into immediately spendable cash.

This is likely in response to the realization that, while housing prices are low, a down payment of at least 3.5% is still required to buy a home. And in this economy particularly, it’s getting tougher to put a substantial amount of money in savings at a rapid pace before the $8,000 tax credit time limit expires. By advancing a down payment to these first-time buyers, a home purchase becomes much more feasable.

What could this mean for the home buying market? It could double the total number of home purchases propelled by the credit program to more than 300,000.

All lenders providing FHA loans will be authorized and implored to offer bridge loans at closing — with simply their supposed tax return to offer in exchange.

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This Post Has 6 Comments

    1. Hi George:

      Although the federal tax credit being referenced in this post no longer exists, we can certainly help you look into your options for a home loan. If you would like to get started online, you can do so through Rocket Mortgage or by giving one of our Home Loan Experts a call at (888) 980-6716.

      Thanks,
      Kevin Graham

    1. Good evening, Phyllis. I’m a writer on the blog, and I’m happy to answer your questions. You can follow this link to see the winners of the Room for Improvement Sweepstakes, which was hosted on the blog. The Fall into Cash Sweepstakes hasn’t ended yet, but it will soon! And we don’t know what the winners did with the money, but I’m sure they found a way to make the most of it!

      Thanks for asking! And good luck!

    1. Hi Abid! I have passed your comment on to our team of mortgage experts who will reach out to you soon to discuss mortgage options.

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