Southern Maryland Association Of Realtors

   


    

        

            

            
            
 
            

                

                    

                        

                        

                        

                            

                                

                                    

                                    
Hi everyone,
                                    
I've become aware there is some conflicting information regarding Secretary Donovan's statements at the Leadership Summit held at last week's NAR Mid-Year Conference.  Here is the latest information from NAR as of Monday, May 18, 2009:
                                    
Monetizing Tax Credit For Downpayment 

                                     

                                    FHA has not yet republished the mortgagee letter on monetizing the tax credit for the downpayment.  Since we are receiving numerous inquiries about the status of the letter, we are providing this  update.  We do expect it soon (possibly today) and do not expect significant changes.   

                                     

                                    We believe the reason for the delay is more administrative in origin than substantive.  First, the Secretary did announce the policy at the NAR Summit last Tuesday.  He wouldn't have made this statement if there was doubt about the policy being implemented.  Apparently since the tax credit was part of the stimulus bill, it required review by other Obama administration officials.   FHA staff inadvertently published the letter without obtaining the necessary concurrence and the Secretary was not aware of it (See red below). 

                                    

                                     

                                    In his speech, Secretary Donovan outlined the main points of the program.  He said:     

                                     

                                    "We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a downpayment. So FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to "monetize" the tax credit through short-term bridge loans. We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit. FHA will be publishing the details shortly." 
                                    
I will let you know as soon as the FHA Mortgagee Letter is posted on the FHA web site!