HUD may create buyer tax credit bridge loans
May 19, 2009 04:00PM
The Department of Housing and Urban Development is hoping to implement a plan that will allow approved lenders to advance the $8,000 tax credit to buyers at closing time. The first-time buyer tax credit, passed as part of the stimulus package, currently does not go to buyers until tax time. But the typical first-time homebuyer has only saved up 4 percent of his or her home purchase price, according to the National Association of Realtors. New Jersey, Pennsylvania, Tennessee, Washington, Missouri and Colorado already have "bridge loan" programs that allow buyers to borrow against the tax credit and repay the loan with their refunds.
[CNN Money]
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Comments
Anonymous
Why do I think this is a bad idea and will lead to a new generation of overextended borrowers...?
Comment #1 Posted By: Anonymous 05/19/09
Patrick
Not a bad idea to spur some sales. I know of one case, in another state, that used it towards their close.
Comment #2 Posted By: Patrick 05/19/09
Anonymous
Will we ever learn?
Comment #3 Posted By: Anonymous 05/20/09
Anonymous
Patrick, This is a horrible idea. The reason the housing market is under water is because buyers bought with too little equity. If you only have 4% of the Purchase Price saved up, then you shouldn't buy. Theres no shame in renting!
Comment #4 Posted By: Anonymous 05/20/09
Anonymous
Obama wheres the change? This policy has been proven to be disastrous!
Comment #5 Posted By: Anonymous 05/20/09
Anonymous
#3- Right On!!!
Comment #6 Posted By: Anonymous 05/20/09
Anonymous
Again we're helping people buy houses they can't afford. UNBELIEVABLE!!! Stop it!!! If people can't afford the home then the home's price gets cheaper. Then people can afford them. Get it? The reason prices went up so much is that lenders lent money to people they shouldn't have. Now that people can't get financing we need to let housing prices fall to levels where people can actually afford them. Please let prices fall. Please.
Comment #7 Posted By: Anonymous 05/20/09
Anonymous
Down payments didn't create the current mess- low downs have been around for years. Lending to a pulse, with no verification of income, created the mess. There are plenty of people that, but for a down payment, are good borrowers. Good for HUD.
Comment #8 Posted By: Anonymous 05/20/09