Q &A on Using First Time Homebuyer Tax Credit

Is the first time homebuyer tax credit available on all loans?

Yes. All first time homebuyer's may take advantage of the tax credit. FHA is the only agency permitting the tax credit to be monetized in the form of a consumer loan or advance.

Can the tax credit be used as part of the 3.5% down payment in North and South Carolina?

No.

Can the tax credit be used as a down payment elsewhere?

Currently there are 10 states that can offer use of the tax credit towards the down payment in the form of a second mortgage with state finance agencies. As of June 1, 2009, North and South Caronlina do not have any agencies offering this program.

What is meant by the purchase of a tax credit? (Applicable in NC & SC)

This term means to monetize the anticipate credit in the structure of an "advance".

What can tax credit "advance" be used for? (Applicable in NC & SC)?

It can be used for additional down payment greater than 3.5%, paying closing costs or buying down the interest rate.

Will Allen Tate Mortgage offer the tax credit "advance"?

No. Recently HUD clarified the definition of tax credit on a conference call June 4th. The purchase of the tax credit cannot be a loan with any defined repayment terms. It is an unsecured advance or promissory note. We have not heard of any lenders that have announced plans to purchase the tax credit at this time.

When must a loan close to be eligible for the tax credit deduction?

All loans must close on or before November 30, 2009.