DOWN PAYMENT ASSISTANCE AND THE $8,000 TAX CREDIT

There were many proponents in favor 

of using the $8,000.00 first time home buyer tax credit as down payment assistance.  This has recently been shut down by HUD.  It seems there were just too many hurdles, IRS issues, the “repayment” issues, ——-

“That tax credit should be savings, not debt,” said Patricia Garcia-Duarte, Executive Director of Neighborhood Housing Services in Phoenix.

Garcia-Duarte said the proposal too closely resembled a now-illegal practice known as seller-funded down-payment assistance, which allowed a home’s seller to “gift” the down payment to a specific buyer through a non-profit organization.  

The FHA loan is still the best way to go as it requires only a 3.5% down payment as compared to at least 10% with other lending institutions.  I am in favor of the 3.5% or higher as forcing people to have a down payment no matter how small gives them equity in their home from the start.  What ever happened to saving to buy something.  That is what got us into this mess in the first place.