FHA loan with 0% down-here's how

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Geotpf_IHB

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Simple. Have the lender (or somebody else) advance you the eight grand you'll get from Uncle Sam after you complete the sale. This would allow you to purchase a house up to $228k and change with zero down.



<a href="http://mortgage.freedomblogging.com/2009/05/12/tax-credit-as-down-payment-on-fha-loans/10395/">Source</a>



Tax credit as down payment on FHA loans?

May 12th, 2009, 6:20 pm ? 8 Comments ? posted by Mathew Padilla, Reporter

Apparently the federal government wants to make it even easier to buy a home with a loan insured by the Federal Housing Administration ? it already allows a 3.5% down payment that can be gifted from a relative.



According to National Mortgage News:



The government today gave the green light to the financing of bridge loans of up to $8,000 to first time home buyers who qualify for tax credits under the Obama Administration?s economic stimulus plan. The new mortgagee letter stipulates that government agencies, non-profits and FHA-approved lenders can give advances on the tax credits. Housing secretary Shaun Donovan told a national Realtor group Tuesday that, ?We want to enable FHA consumers to access the tax credit funds when they close on their home loans so that cash can be used as a downpayment.?



File this one under What Will They Think of Next.
 
[quote author="Geotpf" date=1242297680]Simple. Have the lender (or somebody else) advance you the eight grand you'll get from Uncle Sam after you complete the sale. This would allow you to purchase a house up to $228k and change with zero down.



<a href="http://mortgage.freedomblogging.com/2009/05/12/tax-credit-as-down-payment-on-fha-loans/10395/">Source</a>



Tax credit as down payment on FHA loans?

May 12th, 2009, 6:20 pm ? 8 Comments ? posted by Mathew Padilla, Reporter

Apparently the federal government wants to make it even easier to buy a home with a loan insured by the Federal Housing Administration ? it already allows a 3.5% down payment that can be gifted from a relative.



According to National Mortgage News:



The government today gave the green light to the financing of bridge loans of up to $8,000 to first time home buyers who qualify for tax credits under the Obama Administration?s economic stimulus plan. The new mortgagee letter stipulates that government agencies, non-profits and FHA-approved lenders can give advances on the tax credits. Housing secretary Shaun Donovan told a national Realtor group Tuesday that, ?We want to enable FHA consumers to access the tax credit funds when they close on their home loans so that cash can be used as a downpayment.?



File this one under What Will They Think of Next.</blockquote>
You can bet your booty when it's time to buy I'll be using this FHA program. Why the hell should I put my capital at risk when I can have the gov't do it for me.
 
[quote author="usctrojanman29" date=1242297808]You can bet your booty when it's time to buy I'll be using this FHA program. Why the hell should I put my capital at risk when I can have the gov't do it for me.</blockquote>


As a realtor, you don't even need the tax break. Since you will be kicking yourself back 3%, you will only be putting down a net of 0.5%.
 
[quote author="IrvineRenter" date=1242298553][quote author="usctrojanman29" date=1242297808]You can bet your booty when it's time to buy I'll be using this FHA program. Why the hell should I put my capital at risk when I can have the gov't do it for me.</blockquote>


As a realtor, you don't even need the tax break. Since you will be kicking yourself back 3%, you will only be putting down a net of 0.5%.</blockquote>
You know it, plus you can be sure that I'll be asking for a seller's credit so I can pay for that mortgage insurance or buy down the rate. I just hope the FHA lending program doesn't go POOF by the time I'm ready to buy.
 
Whoaaa there lil' doggie, not so fast!



FHA is an insurance program, not a loan program. Just because HUD says it's possible does not mean lenders are going to accept the guidelines and close anything with this kind of scenario. Also, in OC with a median of $350k (+/-) the 3.5% down is $12,250 but the qualifying income is so high that you might not qualify for the tax credit either.



More loan programs from Hope & Change Inc, powered by sunshine, rainbows and unicorn farts.



My .02c



Soylent Green Is People.
 
[quote author="awgee" date=1242344783]Is it $8,000 or is the lesser of 10% or $8,000?</blockquote>


the lesser. If purchase is $70K, then credit is $7K. The $8K is just the max.
 
[quote author="usctrojanman29" date=1242297808][quote author="Geotpf" date=1242297680]The government today gave the green light to the financing of bridge loans of up to $8,000 to <strong>first time home buyers</strong> who qualify for tax credits under the Obama Administration?s economic stimulus plan.</blockquote>
You can bet your booty when it's time to buy I'll be using this FHA program. Why the hell should I put my capital at risk when I can have the gov't do it for me.</blockquote>
How do you become a first time home buyer again? Is that like a born-again virgin?
 
[quote author="Soylent Green Is People" date=1242343066]Whoaaa there lil' doggie, not so fast!



FHA is an insurance program, not a loan program. Just because HUD says it's possible does not mean lenders are going to accept the guidelines and close anything with this kind of scenario. Also, in OC with a median of $350k (+/-) the 3.5% down is $12,250 but the qualifying income is so high that you might not qualify for the tax credit either.



More loan programs from Hope & Change Inc, powered by sunshine, rainbows and unicorn farts.



My .02c



Soylent Green Is People.</blockquote>


Why would a lender be hesitant to loan if they are covered by FHA insurance?
 
Some lenders have an appetite for certain loan programs. For example, Wells does not offer the 203k loan - an FHA insured loan. Neither does my company (famous for their cartoon dog spokesperson). Although the Government insures the transaction, the cost and hassles involved with certain loan products simply don't pencil out.
 
[quote author="irvine_home_owner" date=1242346725]

How do you become a first time home buyer again? Is that like a born-again virgin?</blockquote>


I believe you are considered a first-time buyer if you haven't owned a home within the last 3 years.
 
[quote author="Soylent Green Is People" date=1242343066]Whoaaa there lil' doggie, not so fast!



FHA is an insurance program, not a loan program. Just because HUD says it's possible does not mean lenders are going to accept the guidelines and close anything with this kind of scenario. Also, in OC with a median of $350k (+/-) the 3.5% down is $12,250 but the qualifying income is so high that you might not qualify for the tax credit either.



More loan programs from Hope & Change Inc, powered by sunshine, rainbows and unicorn farts.



My .02c



Soylent Green Is People.</blockquote>


Some lenders will do so (and charge a fee). The article also indicated that certain local government agencies or nonprofits might do so.



And, yes, it won't apply to most places in the OC. But I guess my point is 0% down loans are BAAACCKKKKK!
 
[quote author="SoCal78" date=1242357074][quote author="irvine_home_owner" date=1242346725]

How do you become a first time home buyer again? Is that like a born-again virgin?</blockquote>


I believe you are considered a first-time buyer if you haven't owned a home within the last 3 years.</blockquote>
Ahh... there was a thread about that here somewhere.



I just googled it and confirmed that is the case... so awesome. So I just have 2+ more years and I'm a newbie again.



Was this a new rule or something that has been around for a while?
 
[quote author="irvine_home_owner" date=1242361132][quote author="SoCal78" date=1242357074][quote author="irvine_home_owner" date=1242346725]

How do you become a first time home buyer again? Is that like a born-again virgin?</blockquote>


I believe you are considered a first-time buyer if you haven't owned a home within the last 3 years.</blockquote>
Ahh... there was a thread about that here somewhere.



I just googled it and confirmed that is the case... so awesome. So I just have 2+ more years and I'm a newbie again.



Was this a new rule or something that has been around for a while?</blockquote>


This mainly (only?) applies to the eight grand tax credit. The three year rule was part of the law when that passed as part of the stimulous package.
 
I believe the rule was there before as there was still a 7500 tax credit (that was really a loan that you had to pay back). However, I do not remember it being a 3 year rule, just a 2 year. I also believe the rule applies with like say first time homebuyer rules when withdrawing from your Roth. I could be just confusing them all though.
 
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