Expert Q&A Archive
Can the "first-time homebuyer" tax credit be used as a downpayment?
Can a person use the first-time homebuyer tax credit as a down payment on their home?
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As long as you qualify under the tax credit parameters, the federal government has approved utilizing the stimulus act tax credit towards the down payment on a home; however, it must be advanced through a “qualified” lender (usually a non-profit), and depending on what state you live in, many homebuyers are finding that there are few lenders out there who are actually offering this program, so you want to check with your local dept of financial institutions to be sure.
Donna M. Wood:
As of May 12, Shaun Donovan, the Secretary of HUD, says that the tax credit can be used as a down payment on an FHA-insured loan. So I think that that is probably the qualifier there. But if you're trying to get an FHA-insured loan, you can certainly - if you qualify in every other way for that tax credit--you can certainly request to have that treatment.