Florida FHA homebuyers may soon be able to use the current $8,000 first-time homebuyer tax credit to cover the required 3.5% downpayment via a process called “monetization,” according US Department of Housing and Urban Development secretary Shaun Donovan. I caught wind of this via a May 12, 2009 Housing Wire article.
Apparently, Donovan released the announcement while at a National Association of Realtors legislative summit this morning, but the Housing Wire article stated that HUD likely won’t release a formal announcement on this topic until next week.
How The FHA Monetization Process Might Work
Most likely, this new FHA-initiated Downpayment Assistance Program (DPA) will allow FHA-approved lenders to monetize the first-time homebuyer tax credit through short-term bridge loans, providing borrowers with access to the funds at the closing table.
“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, according to the NAR.
The tax credit arrived as part of the American Recovery and Reinvestment Act of 2009 for qualifying taxpayers that buy homes in 2009. We’ll see whether this monetization program actually takes root. Stay tuned, as more information will be sure to follow soon.
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I hope you found this post useful! As always, if you or anyone you know is in need of a local Florida mortgage broker, I’m your guy. Call me at 863-604-3019 or apply online for your Florida mortgage. We’ll keep you posted and let you know when it’s time to pull the trigger!
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