So…in order to make things “easy”…cough, cough… for first-time home buyers the government had an announcement about this subject. So what’s the deal?
The tax credit has been approved on FHA loans, but wait…you can’t use it towards the 3.5% down payment part when you actually purchase a house. So essentially you can use it for closing costs, BUT you can’t get the credit early and do that because that would be fraud.
Jeff Belonger wrote a really good post on this, so I’m just sending you to his post to explain it all. In true government fashion, it is so convoluted and difficult, that well bottom line…you should just take the tax credit when you file your taxes.