Change is good: $8,000 tax credit now ineligible for down payment

Many lenders, real estate agents, and home builders applauded when HUD said it would let banks and local governments offer short-term “bridge loans” to cover the down payment for first-time buyers eligible for the tax credit. The loans would have been available to applicants for federally insured mortgages such as Federal Housing Administration loans. 

See:  Home builders see positive signs in market

Now, Federal officials have done a 180 saying that the money cannot be used as a down payment.

See:  Tax credit ineligible for down payment

To many, including myself, this money should be used to for other things than the buyer’s down payment.  Without any skin in the game by homebuyers, we could end up where we are today…buyers need to have equity in their homes to make prudent decisions about their homes.

Sellers of homes in the Prescott, Prescott Valley, Chino Valley, and Dewey-Humboldt need every bit of help they can get and welcome Federal help.  However, throwing good money after bad is in noone’s best interest.

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