Was there or is there a way to use th $8000 as a down payment on an FHA purchase?

  • March 10 2010 - US
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Answers (8)

Was responding to danielki's response TB.
  • March 11 2010
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Profile picture for Texas Banker
Nic,

8K is not borrowed, it is fronted.

Sort of like the cash for clunkers program where the dealership fronts the money expecting to get it back from the government.

I heard some builders fronting the 8K towards the purchase however I also heard a portion of it back fired because of money owed to the IRS.

I say good luck sorting that one.
  • March 11 2010
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I would agree with Wetdawgs :)  I've just been asked this a few time recently and even after the research I've done I feel I'm still out ill advised on the subject.  In the end I guess it's a very, very small section of clients asking about this so I may just leave it be and move on to less complicated files :) 
  • March 11 2010
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Profile picture for wetdawgs
A few lenders, but very few lenders, are willing to do this.  

My humble opinion is if the buyer cannot come up with the down payment without the tax credit they are not ready to buy, so I'm glad that most lenders are not allowing this to happen.
  • March 11 2010
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Down payment cannot be borrowed.

  • March 11 2010
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Profile picture for danielki
Actually the problem is finding a LENDER who will loan the money upfront first. Nobody wants to.
  • March 11 2010
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This is one of those programs that exists,..apparently,...but nobody can find who offers them. I'm eager to hear if any of the other LO's have successful experience with this.
  • March 10 2010
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HUD indicated that the $8,000 (max) could be used as an additional down payment (over and beyond the initial 3.5%) or towards the closing costs.  The hurdle was finding a government agency or HUD approved non-profit that was willing to upfront the money to the borrower.  I read some time back that some States were participating, but I do not remember who.  Hope this helps.
  • March 10 2010
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