Several months ago Congress passed a bill designed to help first time homebuyers by providing an $8,000 tax credit. The idea was that this incentive would bring buyers off of the fence and into the newly reduced foreclosures and short sales. This is one of those good ideas with bad execution.
Before you say, “Chuck, don’t be so hard on Uncle Sam! He’s just trying to help!” I would simply say this; If you ask any Realtor who has worked with first time home buyers or speak to any first time buyer they they will tell you that the number one bearer to buying that first house (especially in the Ashburn, Leesburg, Herndon, and Chantilly areas) is the down payment. This is not rocket science and you can’t say this is some hidden little unknown insight. As a matter of fact, I remember my mother worrying about her down payment when we brought our first home and I hear it everyday when working with first time buyers in the Washington Metro area.
Okay enough with the rant (sorry).
Starting this month first time homebuyers (which by the way is not just for first time home buyers… that will be my next post…) can now use their $8,000 tax credit as a bridge loan for there closing! This means you can use your tax credit to help you with the down payment and closing costs. Before you go out and start buying that really nice looking town house in Ashburn or Leesburg that you’ve been eyeballing. There are as with all government programs a ton of small print. The best way to know if you qualify is to speak to your lender (make sure your lender is an experienced first time home buyer lender!). If you do not have a lender please drop me a quick email and I’ll point you to a few lenders that specialize in first time buyers.