Housing and Urban Development (HUD) Secretary, Shaun Donovan, said on Tuesday that the Federal Housing Administration (FHA) will allow its lenders to facilitate the use of the $8,000 First-Time Homebuyers Credit as down-payment funds through short-term bridge loans. Doing so allows a first-time purchaser to access the tax credit funds at the closing table immediately. I have mixed feelings about this.
On one hand, it is a great way to open up avenues of home-ownership to many first-time purchasers who do not have a ton of liquid cash on hand. Prices are low, inventory is good (but dwindling), and interest rates are unbelievably low. If the only barrier to homeownership for an otherwise