For all other states where such HFA programs do not exist the tax credit may not be used to fund the 3.5 percent downpayment required for FHA loans. As always, the 3.5 percent down payment may be a gift from a family member, employer or nonprofit, charitable organization. FHA-approved nonprofit organizations and FHA-approved lenders may monetize the tax credit for down payments in excess of 3.5 percent, closing costs and interest rate buy downs. Mortgage industry leaders have indicated that this type of product may not be immediately available to consumers.

EXAMPLE OF TAX CREDIT IN USE WITHOUT HFA PROGRAM

In conjunction with an IdaMortgage loan, a subordinate loan will be offered to qualified first-time home buyers a maximum of 5% of the sales price up to $7,000, not to exceed 100% combined loan to value. A fee will be charged of $250 with $150 refunded upon repayment of the loan on or before the loan due date. The loan will accrue interest at 3.0% with a due date of July 1, 2010. The Tax Credit Second Loan is expected to be paid off from the borrower’s tax refund obtained through the application of the federal tax credit. Borrower must be a first-time home buyer and qualify for an IdaMortgage loan.

“Welcome Home Idaho”. Idaho REALTORS® will pay off the interest for first-time buyers using IdaMortgage program.