Tax Credit Advance Loan Program

G reat news coming out of Olympia! Washington Realtors is in the process of teaming up with the Washington State Office of the Treasurer, Housing Finance Commission, and a yet to be selected financial institution to create an easy way for first time homebuyers to borrow the up to $8,000 Federal tax credit to help with down payments.

You see about 50% of qualified buyers, with good credit and jobs are unable to buy and take advantage of the tax credit because they lack down payment. This loan program will give buyers their credit before its due in the form of a short term loan, so that they can close on a home. Then once the new homeowner files their taxes, the IRS will pay back the loan from the homeowner’s tax credit proceeds. This is a win, and a first in our Nation.

The house bill authorizing the $25 million in funds for this has passed the House and the Senate and now awaits the Governors signature which is expected within a week. Once that has happened it should take about 30 – 45 days to implement the program and have funds available to first time homebuyers. Washington Realtors will be depositing $400,000 in the selected financial institution to provide security ageist loans. We are actively putting our money at risk to help first time homeowners take advantage of this tax credit and give a little boost to our housing market. Love seeing WR lead the way!

Comments

  1. Peggy Hall says:

    So, as a first time home buyer, how does my mortgage company implement this for me?

  2. Nanci Barnhard says:

    Nate,

    Great information. As you know I do lots of these loans w/borrowers who really need this. The big issue is with FHA which is the big loan catagory these borrowers fall into because of the higher ratio allowance, lower mortgage monthly mortgage insurance, more forgiving guidelines to past credit issues, no reserves etc. The guidelines are specific as to what source the funds can come from. I have been in contact with FHA regularly in hopes of them opening up more avenues for the seasoning and acceptable sources of the funds. Currently the funds have to be the borrowers own money. The funds can only be borrowed if they are secured against something tangible i.e. a vehicle that has the availabilty to incur a loan on it. The home can not be included in the security, Washington State Housing Finance Commission or a close family relative and the list is specific, can either lend the money or gift the money to them. If the funds are borrowered we have to factor in the additional debt. I’d like to call FHA, if you are ok with it, to see what their position is on this proposal??? This would be so awesome and would make my job so much simpler. We’d be rockin’
    Thanks Nate, awesome info as always.
    Nanci