Comments on: Bridge Loans Using $8,000 Homebuyer Tax Credit

By: Michaela Polacco

Michaela Polacco — Tue, 13 Sep 2011 05:46:01 +0000

Hello,dear sir First, sorry for my bad English. But i must talk about your Website / Blog. I was found your Blog on search with Google an today is my second visit here. I am a Internet Marketer and looking for some good Information for my website autopolieren it is a new site. I am happy you visit my Blog to. Thank you very mutch an have a good time. Best Regards an good Business.

By: Heather

Heather — Thu, 10 Dec 2009 18:59:22 +0000

In short, no. You can’t get $8,000 for buying a $10,000 house. Why?

There’s no minimum purchase, but the tax credit is written as “10% of the purchase price, up to $8,000″. Thus, if you spent $10,000 on a home, you’d get 10% of that price – or $1,000 – as a tax credit.

One other point: there’s no such thing as a $10,000 home in metro Phoenix that one could actually live in. If it was priced at $10,000 it would not pass any kind of health and safety inspection, it would be condemned. See this post for an example of a Phoenix-area house listed for sale at $12,500 — http://thephoenixagents.com/the-highs-and-the-lows-3/

Thanks again for reading! We hope you come back often and post more comments.

By: john bossung

john bossung — Tue, 08 Dec 2009 22:57:13 +0000

could a qualified person get a 8000.00 tax credit to buy a 10000.00 house?

By: Heather

Heather — Thu, 02 Jul 2009 00:32:36 +0000

Thanks for visiting our humble abode! I agree with you completely Bill! The thing that’s always worried me is how much processors of these loans will charge to make them. I can see it getting very unethical very easily. How about I make you a loan for your First Time Homebuyer (FTHB) Tax Credit, then you sign over your tax refund to my corporate bank account, and I pledge to give you the difference? Hmmm. Sounds good on the surface, but how long do you think it will take processors to figure out that some (many?) homebuyers won’t remember to check later in the month (year?) for their ‘refund’? The scenario you’ve described is scarier, because so few consumers understand the compounding powers of interest. Two percent sounds SO low, unless it isn’t, just as you’ve described.

By: Bill Parker, CPA*

Bill Parker, CPA* — Wed, 01 Jul 2009 09:01:58 +0000

Hello:

I would not worry too much about your under-used FTHB tax credit ($4,000). The regulations will protect your client.

The part I don’t like about this offer, is it allows the party processing the loan to collect 2% of the amount loaned. I have asked many of my tax CPA friends the results they are seeing when their FTHBs are amending their 2008 tax returns, filing electronically and having the money direct deposited to their account. Two weeks. All positive responses. My problem is, you take that 2% fee, multiply it by 52 weeks, then divide it by the two weeks you wait to get your money back for free, and you end up at an annualized rate of about 52%. If the borrower has the money, or can receive a gift (which does not have to be repaid, but may be) to help out, I tell my clients to use their own money. Am I missing something?

By: Nearly Mid-2009 Market Report for Charlottesville and Albemarle | Real Central VA

Mon, 15 Jun 2009 04:07:44 +0000

[...] $8,000 tax credit (h/t TPREG)is absolutely on the minds of first-time homebuyers. Why wouldn’t it be? It’s [...]

By: Heather

Heather — Wed, 10 Jun 2009 15:44:44 +0000

Hello Xander,
I’m not aware of anyone doing these bridge loans at this time either. The FHA’s new rule allows “state Housing Finance Agencies and certain non-profits to ‘monetize’ up to the full amount of the tax credit…” (http://is.gd/Xltf). So far none of my preferred mortgage lenders know of anyone making these loans either. Perhaps a friend, family member or even your church would be willing to come to your aid? If I learn more, I will post here. Thanks for visiting our site; we sincerely wish you the best of luck in wrapping up the deal on your new home.

By: Xander

Xander — Wed, 10 Jun 2009 06:32:31 +0000

Heather, please contact me ASAP if you know of anyone in PHX actually processing these bridge loans.

It’s so important to me right now, TIA!

By: Doug Francis

Doug Francis — Thu, 04 Jun 2009 18:46:59 +0000

I had to pull out my original copy of the HUD Mortgagee Letter 2009-15 from May 11th (that was retracted) to believe that this wasn’t a mistake. But I saw the new one on the HUD site. Wow! And thanks for the update.

Let me just say that I imagined pay-day loan sharks in May… and know that they will be migrating in to exploit this bloody mess.

Yes the intent is genuine, but stating 2.5% in fees sets the standard and that they will be a “soft” or “silent” seconds creates a future time-bomb for the title insurance folks. The potential IRS issues also seem daunting because, I believe, most people using FHA loans do their own taxes.

By: Easy come, easy go. Tax credit won’t help with downpayment. — The San Diego Home Blog

Wed, 03 Jun 2009 15:27:01 +0000

[...] Update to the update: Heather says it well. [...]

By: Top 5 real estate posts of the day Monday 6/1/2009

Top 5 real estate posts of the day Monday 6/1/2009 — Tue, 02 Jun 2009 15:40:13 +0000

[...] time home buyers allowed to use $8,000 tax credit for closing costs or additional down payment – Heather Barr, Justin McHood, Brad Pevehouse, [...]