From the HUD Website:

Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration’s new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today’s action will help stabilize the nation’s housing market by stimulating home sales across the country.

The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today’s announcement details FHA’s rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA’s new mortgagee letter, visit HUD’s website.

"We believe this is a real win for everyone," said Donovan. "Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation’s housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we’re doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing."

Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today’s announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower’s own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today’s action permits the first-time homebuyer’s anticipated tax credit under the Recovery Act to be applied toward the family’s home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.

To explore financing options for real estate in Hampton Roads or Williamsburg VA  contact: John@MrWilliamsburg.com

With today’s combination of lower home prices, some of the lowest interest rates the industry has ever offered, and the $8000 tax incentive for first-time buyers, buying a home has never been so attractive. The only real hurdle left for many Americans is coming up with a down payment. With this in mind, we’ve put together some of the most frequently asked questions we get about down payments in today’s market in the Hampton Roads and Williamsburg Va areas.

Q. Are there any no-down payment programs left?
Yes. While it’s true that most of the popular no-down payment programs disappeared in the wake of the subprime mortgage collapse, there are still two longstanding government-backed programs that offer mortgages with no down payment: the USDA Rural Development Program and the VA Loan Program.
A USDA Guaranteed Loan is a government-insured, 100% purchase loan. This means there is no down payment required if you – and the house you intend to buy – qualify for the program. Not all areas qualify, but you’d be surprised at how many neighborhoods in your area do. There are income and other limitations, but if coming up with a down payment is challenging, you might want to consider this program.
If you or your spouse is a military veteran, you may qualify for a 100% financed loan from the US Department of Veterans Affairs. More than 29 million veterans and service personnel qualify for this service benefit. Give us a call to find out if you’re one of them.
Q. Are there any other government-insured programs that can help someone struggling with a down payment?
Yes. In 1965, the federal government created the FHA loan programs to encourage homeownership throughout the country. FHA-insured mortgages offer many benefits, including a minimum down payment of 3.5%. FHA-insured loans have grown in popularity recently due to the seller’s ability to pay closing costs up to 6% and a temporary increase in loan limits up to $729,750 in certain high-cost areas, which allows more potential buyers to utilize this program.
Q. May I use a gift from family members as part of my down payment?
Yes. In many cases, immediate family can provide monetary gifts to be used as a down payment. There are restrictions of course, and strict documentation will be required, but we will gladly walk you through the finer details of this process. Be sure to mention this option when you’re filling out an application with us.
Q. May I use funds from my IRA for my down payment?
Yes. First-time home buyers can use funds from an IRA under certain circumstances for a down payment. The rules regarding this option, however, can be complicated, especially with a Roth IRA, and it’s important to understand any and all tax implications before tapping into these accounts. Please talk to your tax professional before making any decisions. If you don’t have one, we’ll gladly refer you to one we work with on a regular basis.
Q. May I use the $8,000 tax credit as my down payment?
No. At the time of the writing of this article, qualified first-time home buyers do not have direct access to the $8,000 credit to use as a down payment. In May, HUD officials made an announcement to the contrary, but statements backing the announcement were quickly withdrawn from the HUD website. This doesn’t mean that HUD and lawmakers will not allow this in the future. We’re following this issue closely and will let you know if anything changes. Just keep reading our newsletters and other materials we send to you or give us a call and we’ll let you know if any progress has been made.

To explore loan options, monthly payments, etc for mortgage loans in the Williamsburg VA and Hampton Roads areas contact Nina Efird with Suntrust Mortgage.

Nina brings more than 20 years of experience to her clients. With her vast experience in real estate and mortgages, she has the unique ability to understand the expectations and needs of all parties involved in the mortgage financing process. Nina is known throughout the community for her ability to quickly identify and match each individual’s goals with the appropriate loan products and ensure that her clients’ needs and expectations are met.
http://www.suntrustmortgage.com/loanofficer.asp?nefird

Click here to see if you or your home qualifies for USDA Rural Development Program. http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?NavKey=home@1

By now, you’ve heard about the new Tax Credit passed by Congress for first-time Hampton Roads and Williamsburg VA home buyers.

But did you also know…

• You must purchase and close on your new home by December 1, 2009
• The credit also applies to those who have not owned a home in the past 3 years
• This credit does not have to be repaid
• If you wait too long, you may lose this opportunity!

A record 844,000 prospective homebuyers visited the National Association of Home Builders’ FederalHousingTaxCredit.com Web site in February to learn about the new $8,000 tax credit for first-time homebuyers that was enacted last month as part of the landmark $787 billion economic stimulus package.
Find out more at  www.FederalHousingTaxCredit.com

But only if you meet the following criteria.

Up to an $8,000 home-buying incentive from the U.S. Government plus  low interest rates from our prefered lenders when you buy now. 

First question, Are you eligible?

Answer: If you have not owned a home in the past three years, you may qualify. (That’s right, even if you or your spouse owned a home more than three years ago, you are still considered first-time homebuyers and may qualify for the incentive.)

Am I entitled to the full $8,000 home-buying incentive?
It depends on your modified adjusted gross income (MAGI).

How does the home-buying incentive work?
It is a direct tax credit that reduces the amount of taxes you owe. It’s different from a tax deduction, which only reduces the amount of your income that is subject to tax.

If your eligible tax credit is more than what you owe in taxes, the balance will be refunded to you. (See an example scenario at FederalHousingTaxCredit.com

How long does the program last?
The federal home-buying incentive applies to homes purchased (closed) on or after January 1, 2009, and before December 1, 2009.

The tax credit can be claimed on your 2008 or 2009 tax return.

For additional details on the federal home-buying incentive, visit FederalHousingTaxCredit.com

Want to explore what your monthly payment would be ? email John@MrWilliamsburg.com for further information

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You can see the full schedule here vhda

Are you interested in becoming a homeowner but don’t know where to begin? The Virginia Housing Development Authority and local nonprofits are offering free home ownership education classes throughout November in the Hampton Roads region.

Homeownership education classes cover topics including credit issues, personal finances, home inspections and the role of lenders and real estate agents. To become eligible for VHDA loans, borrowers must complete VHDA’s Home ownership Class. Attend one of the many free sessions below to learn about the advantages of home ownership.

Upcoming classes will be held in Chesapeake, Newport News, Portsmouth, Hampton, VA Beach and Yorktown Virginia

You can find out more about VHDA here