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

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Under the American Recovery and Reinvestment Actof 2009, first-times homebuyers can qualify for the tax credit for purchasin g their first home after filingy their taxes. But under a new program announcee Friday, state housing finance agencies and nonprofit groupw can advance money to homebuyers up to the full amounyt of their tax credit so the moneyu can be used on ahome purchase, eithert to pay closing costs or to add to a down "Home buyers using FHA-approved lenders can applyh the tax credit to their down payment in excess of 3.5 percent of appraiser value or their closing costs, which can help achievre a lower interest rate," a HUD announcemenr said.
"Families will now be able to apply theire anticipated tax credit toward their home purchase right away," Donovan said in the announcement. "At the same time we are puttingy safeguards in place to ensure that consumers will be protecterd fromunscrupulous lenders. What we're doing todayh will not only help these families to purchased their first home but will present an enormous benefiyt for communities struggling to deal with an oversupplgof housing." The stimulus tax credit can be claimedx on a taxpayer's 2009 return, or througnh an amended 2008 FHA will still requir that homebuyers pay a 3.
5 percent down HUD cited National Association of Home Buildersx data showing that the first-time homebuyer tax credit will stimulate 160,0090 home sales across the with 101,000 of those sales being to first-time buyers and 59,000 to existing homeowners who be able to sell thei r home to a first-time buyer. .