Tuesday, June 02, 2009
$8,000 Tax Credit Applied in Illinois
I just wanted to take a minute to clarify things with respect to the “monetization” of the first time homebuyer tax credit in Illinois
There may be the impression by Realtors, mortgage professionals and buyers that HUD’s recent mortgagee letter that a program is now available to lend home buyers/borrowers their tax credit money so that they could be used for downpayment and closing costs. Simply not true.
The HUD mortgagee letter indicates that the monies acquired through a loan program to “monetize” the tax credit qualify for use in conjunction with FHA loan products. Don’t expect that an FHA borrower in Illinois today can apply for a short-term tax credit loan in conjunction with their FHA mortgage. We’re not aware of any FHA lenders in Illinois that are doing that right now. Most states that have established a monetization program have done so through their state housing authority. IAR has been in discussions with IHDA for some time to explore the possibilities, challenges and resources available to establish such a program, but, again, there is not currently a program available in Illinois.
Also, please keep in mind that this discussion only relates to monetization for downpayment purposes, the tax credit is still in place for income tax filing purposes.
We should ask our Illinois state representatives why they haven't created a mechanism to create silent seconds for the purchase process.
