The $8000 First Time Home Buyer Tax Credit is available for anyone who has not owned a home in the last 3 years and may be used as a down payment in certain situations.
To use the $8000 tax credit as a down payment, it will need to be set up as a soft second mortgage from a state housing agency or FHA-approved non-profit organization.
In addition, the First Time Home Buyer will need a copy of the plan (and terms) and will need to submit to mortgage lender for approval.
General guidelines on the use of Secondary Financing from the advance of a First-Time Homebuyer Tax Credit are as follows:
*Loan must close on or before November 30, 2009 or as amended by the IRS:
*Secondary Financing may be acquired from an eligible federal, state or local government agency or FHA approved non-profit agency
*The secondary financing source must be approved per MCC/DPA Approval Guidelines and Procedures.
*Borrowers should consult a tax advisor and/or refer to IRS Form 5405 for complete eligibility requirements.
*Allowed for borrowers who have had no property ownership during the three (3) years prior to the closing/disbursement date of the subject loan, including property owned jointly with a spouse
*Property may not be purchased from a related person or entity
*Provides funds up to the lesser of $8,000 or 10% of the purchase price based on IRS calculations. Consult a tax advisor or IRS Form 5405.
*Second lien may be a “soft” (silent) with deferred payments – but requires approval from first mortgage lien holder
*Payment must be included in ratios if payments are required initially or are deferred less than 36 months
*Second Lien may not have a balloon payment due in less than 10 years
*Funds may be used only for down payment, closing costs, and prepaid expenses. No cash back to the borrower.
Please feel free to contact me, Gerald Santoro, directly for more information about using the $8,000 Tax credit as a down payment, or any other First Time Home Buyer and home financing questions. 866-528-2888 ext 310
*This is not an offer to lend. 
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