Under the current Federal Stimulus Bill signed into law in February, Congress approved an $8,000 first time home buyer dollar for dollar tax credit. Until recently, this credit was not able to be used to assist with the buyer’s down payment. However, this week the Federal Housing Administration (FHA) announced a plan that will allow first time home buyers to get a bridge loan and use the $8,000 towards their down payment if they use an FHA insured government loan.
An FHA government insured loan has become more popular in the Bay Area because of its increased loan limits ($729,750 for a single family home) and low 3.5% down payment requirement. With the $8,000 bridge loan, which would come due when the home buyer received their tax refund next year, first time home buyers are required to put even less money down on a home. For example, a $400,000 purchase price requires $14,000 (or 3.5%) down payment with an FHA home loan. If you were to take advantage of the $8,000 bridge loan, you would only have to have a $6,000 down payment to become a home owner in 2009. This translates to a $62,800 gross annual income with today’s interest rates.
If you, a friend or family member would like to determine if this program is right for you, please contact me and we can examine your financial situation in more detail. If you want to find Chris, he’s with Mortgage California in San Mateo.
First time buyers shopping for a single family home or condo in the San Mateo-Foster City area have much to choose from today. We would be happy to talk with you about your wants and needs and help you make them a reality. Just click the “Contact Us” button on the left and send us your message.