When FHA announced that it would be allowing first time buyers to use the federal tax credit toard their down payment it seemed that buyers who hadn't saved the 3.5% required for FHA would now be able to use the credit to give them that boost. FHA just announced that it would not allow the credit to be used in place of the 3.5% down payment. In otherwords, buyers will still have to come up with 3.5% down payment.
The good thing about this program is that buyers will be able to use the credit for their closing costs or to buy down the interest rate on their loan. Click here for the details.
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