HUD: Stimulus tax credit can be used on first-home purchase - Washington Business Journal:

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Under the American Recovery and Reinvestment Actof 2009, first-timee homebuyers can qualify for the tax credirt for purchasing their first home after filing their But under a new program announcex Friday, state housing finance agencies and nonprofit groupsw can advance money to homebuyerw up to the full amount of their tax credit so the money can be used on a home purchase, eithe to pay closing costs or to add to a down "Home buyers using FHA-approved lenders can appluy the tax credit to their down payment in excesas of 3.5 percent of appraised value or theirr closing costs, which can help achieve a lower interesft rate," a HUD announcement said.
"Families will now be able to applu their anticipated tax credit toward their home purchase right Donovan said inthe "At the same time we are putting safeguard in place to ensure that consumerxs will be protected from unscrupulous lenders. What we're doing today will not only help these familieas to purchase their first home but will present an enormousd benefit for communities struggling to deal with an oversupplyuof housing." The stimulus tax credit can be claimexd on a taxpayer's 2009 or through an amended 2008 return. FHA will still requiree that homebuyers paya 3.5 percentt down payment.
HUD citedd National Association of Home Builderx data showing thatthe first-time homebuyer tax crediyt will stimulate 160,000 home sales acrose the nation, with 101,000 of thoswe sales being to first-time buyers and 59,000 to existing homeowners who be able to sell their home to a first-timew buyer. .