Big Improvement to First-Time Buyer Tax Credit

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.

Previously, most buyers wouldn't receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.

The FHA's approved lenders will be permitted to "monetize" the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

Now, we need the government to raise the income cap on who qualifies for this tax credit. A couple currently cannot earn more than $150,000 to qualifty ($75,000 single). Consequently, the tax credit is still not very Manhattan friendly.