May 21, 2009
News reports that the federal government is backing away from its plan to permit eligible borrowers to monetize the first-time homebuyer tax credit are off the mark, a spokesman for the U.S. Department of Housing and Urban Development says.
“The technical details are still being finalized and will soon be published in a mortgage letter and posted on our Website,” Lemar Wooley, a HUD spokesperson, told REALTOR Magazine Wednesday afternoon.
Under the guidance that’s under development, state agencies and other HUD-approved entities would be able to provide short-term bridge loans that households could use to help with their downpayment. The loans would be repaid with the proceeds from the households’ federal tax credit.
The loans were announced on the opening day of NAR’s 2009 Midyear Legislative Meetings in Washington, D.C., last week. In this announcement, HUD Secretary Shaun Donovan said guidance would be issued shortly.
When the guidance is released, it is expected to cover eligible lenders and set parameters for loan terms and repayment.
Source: REALTOR Magazine Online