Today at NAR’s Midyear Legislative meetings, HUD Secretary Donovan announced that the housing agency is planning to offer bridge loans to allow first time homebuyers to use the $8000 tax credit towards their down payment. As an aside, we have also heard — unconfirmed rumor at this point — that VHDA is planning a similar program. We’ll announce details as they become available.
NAR’s Speaking of Real Estate blog says details will be announced during Secretary Donovan’s keynote address.
UPDATE: Here is the text of Secretary Donovan’s prepared remarks, given during his keynote address this afternoon:
We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a downpayment. So FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to “monetize” the tax credit through short-term bridge loans. We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit. FHA will be publishing the details shortly.