I thought it was probably too good to be true.
Wednesday, I wrote that there was talk going around the Interweb that FHA was going to allow the $8000 credit that applies to first-time home buyers to be used as a downpayment at closing, but that lenders were telling me they weren’t quite sure of that yet. Thursday, the Office of Management and Budget confirmed they were putting the brakes on that for now.
FHA loans are popular with buyers because they only require a downpayment of 3.5%, but right now FHA rules state that the money for a downpayment can only come from:
- money in the bank
- a gift from a family member, or employer-contributed money
- government agencies, or non-profit sectors of federal, state or local government
- non-profits approved by FHA
- borrowing from another home, or other secured funds like your 401-k
More to come, this whole thing is going to continue to be fluid. Should be interesting …
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