With President Bush signing into law a bill that aims to help over 400,000 homeowners from losing their homes into foreclosure, buyers sitting on the fence should also know that it changes how you can purchase a home through the Federal Housing Administration, or FHA.
The law also requires buyers to put a down payment of 3.5% for a FHA Loan. Previously, buyers only required 3% as a down payment.
But what may affect buyers even more is that sellers are no longer allowed to gift the down payment to the buyer. New Home Builders can no longer give you your down payment and sellers can no longer give you an incentive to buy their home by handing you a down payment from their proceeds.
Buyers should be aware of this. FHA loans are becoming the most popular mortgages out there. Right now, buyers can still accept a down payment from a new home builder or seller before October 1, 2008.
The new housing bill also gives first-time home buyers a tax credit of 10% of the sales price (up to $7500). In the Phoenix area you’re most likely going to get the entire $7500 tax credit with current market prices. It should be noted that although the tax credit will benefit you on next year’s taxes - it is really an interest-free loan from the government. You’ll be paying it back over the course of the next 15 years.
Is now the right time for you? If you have good credit and have been waiting for the right time but don’t necessarily have a significant down payment you may want to start searching now - if the time is right for you and/or your family.
You can use arizonafusion’s map-based search or our just released fusionpower search for the ultimate property search experience!
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