Christi Nelson's Lake Oroville Real Estate Blog

Qualified, first-time home buyers using a Federal Housing Administration (FHA)-insured mortgage now can apply the $8,000 federal tax credit toward their down payments, the Dept. of Housing and Urban Development (HUD) announced today.

Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent down payment 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. 

For more information, please visit:

 http://www.hud.gov/news/release.cfm?content=pr09-072.cfm

What Is an FHA Loan?

An FHA loan is offered by a conventional lender, but the government agrees to insure the loan, meaning less risk for the lender in case the borrower defaults. FHA loans are attractive to buyers as well, as they require lower down payments and are available to those with less than perfect credit. There can be some requirements the property will need to meet for an FHA loan so consult your real estate professional as well as your loacal lender regarding Oroville’s FHA loan limits.