HUD: Stimulus tax credit can be used on first-home purchase - Atlanta Business Chronicle:

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Under the American Recovery and Reinvestment Actof first-time homebuyers can qualify for the tax credit for purchasin g their first home after filing theidr taxes. But under a new program announced Friday, state housingb finance agencies and nonprofit groupd can advance money to homebuyers up to the full amoungt of their tax credit so the money can be used on a home either to pay closing costsa or to add to adown payment. "Homee buyers using FHA-approved lenders can apply the tax credit to their down payment in excessxof 3.
5 percent of appraised valud or their closing costs, which can help achieve a lower interest rate," a HUD announcement "Families will now be able to apply theirt anticipated tax credit toward their home purchase righty away," Donovan said in the "At the same time we are puttinfg safeguards in place to ensure that consumeras will be protected from unscrupulous What we're doing today will not only help thesr families to purchase theirf first home but will present an enormousd benefit for communities struggling to deal with an oversupplgy of housing.
" The stimuluz tax credit can be claimed on a taxpayer'sz 2009 return, or through an amended 2008 FHA will still require that homebuyers pay a 3.5 perceng down payment. HUD cited National Associatiom of Home Builders data showing thatthe first-time homebuyetr tax credit will stimulate 160,000 home sale across the nation, with 101,000 of those sales being to first-timw buyers and 59,000 to existinhg homeowners who be able to sell their home to a first-tim e buyer. .