After a false start, details of the new program that allows home buyers to use the first time home buyer tax credit at closing have finally been released here. Here are the major points:
The program can only be used on FHA-insured loans. VA, conventional, and other programs are not included.
The credit cannot be used towards the required 3.5% down payment. Closing costs, mortgage discount / origination point(s), and other closing costs can be covered by the credit.
So although you can’t get your new home with no money out of pocket, you can use the credit to “buy down” your mortgage interest rate and/or even possibly negotiate a lower price on the home by minimizing the amount of money you would have to ask for from the seller for closing cost assistance.
This is very good news!
