$8000 Home Buyer Tax Credit – FHA Home Loan and 620 Credit Scores

If you are considering buying a home here in 2009 you are right in the middle of one of the greatest times in US history to get the deal of a lifetime. A major portion of this deal is the $8000 home buyer tax credit offered by the US Government to first time home buyers who buy a home in 2009.

To get perhaps the best home purchase and mortgage deal possible a few things need to line up in your favor.

  • You will need enough cash to cover 3.5% down payment and your closing costs. But it all depends on what your credit scores are. Are your scores less than 620? If so, then you will want to improve your credit scores to put yourself in a position to buy a home as a first time buyer with an FHA home mortgage.
  • You need to be a first time home buyer.
  • You will need a minimum credit score of 620 to qualify for an FHA home loan. This is perhaps one of the best first time home buyer loan programs in US history. If your scores are under 620 you will need to do some work on your credit report to improve your scores.
  • You need to purchase your new home in 2009 before December 1 to qualify for the $8000 tax credit.

Here’s the big question you may be asking from this list:

If I do not have the money for down payment then what are my options? Your options are varied, especially if you decide to try to qualify for an FHA mortgage program.

Your down payment and closing costs can be given to you in the form of a gift from a relative. You can also borrow the money for your down payment and closing costs. Just make sure that if you decide to borrow the money that you coordinate the terms of the loan allow you to still qualify for your mortgage. Work closely with your loan officer or housing agency counselor to make sure you still qualify if you have to borrow the money.

Perhaps the best place to get money for a down payment and closing costs is from the $8000 home purchase tax credit that is available for first time home buyers from the US federal government. FHA is rolling out plans to allow this tax credit to be advanced to you in the form of a small tax credit short term bridge loan. If you take advantage of this short term tax credit bridge loan then you will be expected to pay the loan back in 2010 when you get your tax refund that contains your tax credit.

Stay tuned for more updates on the status of the $8000 home buyer tax credit and the short term bridge loan as program details roll out.

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