HUD: Stimulus tax credit can be used on first-home purchase - Washington Business Journal:

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Under the American Recovery and Reinvestment Actof 2009, first-timew homebuyers can qualify for the tax credit for purchasing theitr first home after filing theidr taxes. But under a new program announced state housing finance agenciesx and nonprofit groups can advancer money to homebuyers up to the full amounft of their tax credit so the moneg can be used on a home either to pay closing costs or to add to adown "Home buyers using FHA-approved lendersd can apply the tax credit to thei r down payment in excess of 3.5 percenr of appraised value or their closingf costs, which can help achievwe a lower interest a HUD announcement said.
"Familiexs will now be able to apply their anticipatefd tax credit toward their home purchasrright away," Donovan said in the announcement. "A t the same time we are putting safeguardsx in place to ensure that consumers will be protecter fromunscrupulous lenders. What we'rde doing today will not only help these familiesa to purchase their firstf home but will present an enormous benefit for communitiesa struggling to deal with an oversupplgyof housing." The stimulus tax credit can be claimed on a taxpayer'zs 2009 return, or through an amended 2008 return. FHA will stil require that homebuyers paya 3.5 percengt down payment.
HUD cited National Associationn of Home Builders data showing thatthe first-time homebuyefr tax credit will stimulate 160,000 home salesx across the nation, with 101,00p0 of those sales being to first-time buyers and 59,000 to existingt homeowners who be able to sell their home to a first-timed buyer. .