“Remember when I wrote- just two days ago- about a new HUD program that would allow first time homebuyers to potentially buy a new home without a downpayment? I likened the deal to the everpopular, “”available only through this exclusive television offer”” SHAMWOW… and upon reflection- two days later- that may have been a pretty appropriate bedfellow.
This morning, I received this letter from one of the lenders that I work with. I’ve edited slightly, and hidden the bank’s name:
We have received numerous calls and emails requesting guidance on HUD’s recently released Mortgagee Letter 2009-15, which allows government agencies and other authorized entities, including FHA approved lenders, to offer either long-term secondary financing; or “short-term or bridge” loans secured by the anticipated tax credit for first time homebuyers established by the American Recovery and Reinvestment Act of 2009 for purchases and loan closings made prior to December 1, 2009.
Please be advised that the Mortgagee Letter has been put on hold by HUD Secretary Donovan and has been removed from their website; therefore, until further guidance is received from HUD and BANK’S NAME PROTECTED has provided specific direction on using first-time homebuyer tax credits for the downpayment, BANK’S NAME PROTECTED will not honor any loans where secondary financing, short-term or bridge loans were originated and secured on future first time homebuyer tax credits.
Note that this doesn’t necessarily mean that this program is dead, but it’s definitely curious that such a major program was announced and then “”unannounced”” within such a short period of time.
The major takeaway is this: when it comes to financing a new home, the rules, standards and incentives are changing on an almost constant basis. If you’re considering buying a new home, I can’t emphasis enough how important it is that you speak with a reputable, solid mortgage specialist. They’ll not only be able to paint a clear picture of what type of home (and at what cost!) that you can purchase, but they’ll also be able to help you sort through the morass of both State and Federal programs and standards. It’s a hugely important step.
If you need any recommendations, let me know.
If you need a shamwow, click here.”