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

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Under the American Recovery and Reinvestment Actof first-time homebuyers can qualify for the tax credi t for purchasing their first home afteer filing their taxes. But under a new programj announced Friday, state housing finance agenciesa and nonprofit groups can advance moneuy to homebuyers up to the full amount of their tax credit so the mone can be used on a home either to pay closing costs or to add to adown "Home buyers using FHA-approved lenders can appl y the tax credit to theirt down payment in excessx of 3.5 percent of appraised value or their closint costs, which can help achieve a lowert interest rate," a HUD announcement said.
"Familiezs will now be able to applt their anticipated tax credit toward theidr home purchaseright away," Donovan said in the announcement. "At the same time we are puttinv safeguards in place to ensure that consumers will be protectesd fromunscrupulous lenders. What we're doing todauy will not only help thess families to purchase their first home but will presenr an enormous benefit for communities struggling to deal with an oversupplyhof housing." The stimulus tax credit can be claimec on a taxpayer's 2009 return, or througn an amended 2008 return. FHA will still requirwe that homebuyers paya 3.5 percenft down payment.
HUD cited National Associatioj of Home Builders data showing thatthe first-tim homebuyer tax credit will stimulate 160,000 home sales across the nation, with 101,000p of those sales being to first-time buyerse and 59,000 to existing homeowneras who be able to sell their home to a first-time .