You may remember I wrote a post about how you could use the $8,000 tax credit as a down payment for a Salem Oregon home with a “new plan” that was announced, only to retract it 24 hours later.

So…in order to make things “easy”…cough, cough… for first-time homebuyers 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.


  1. I am still avoiding the subject – because there are so many rules to it and not every lender can offer it and it only applies to FHA and…. and…. and like before my guess is we are subject to change on this one… seems like they are working on getting the bugs worked out and this will be great for buyers

    • I regret posting about it the first time, because now I feel obliged to talk about it and…and…and…I guess it will give me a few blog topics for a while.

  2. I got an email that was a little eye opening on this subject – it said that these funds can be used for closing costs but not down payment – still looking for the real facts and that currently there were 10 states set up for the program and Oregon was not one…. but it will come… and we will see what the guidelines are – giving your buyers a heads up is a smart thing to do.

    • Thesa yes I read the memo that said they wanted people to have some “skin in the game” so you can use it for anything over the 3.5% down for FHA.

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