To builders struggling to survive this recession, the plan to allow buyers to use an $8,000 federal housing tax credit at the closing table with an FHA loan sounds like manna from heaven.
But two weeks after the proposal was announced by HUD Secretary Shaun Donovan at a National Association of Realtors gathering, the details have still not been released, causing some to wonder if the proposal was revealed prematurely and perhaps permanently scuttled.
That perspective was supported by HUD’s withdrawal of a “mortgagee letter” to its lenders that provided some information about the program. (However, that letter did not say whether all FHA-approved lenders would be able to offer a the tax credit monetization via a bridge loan to all buyers using FHA financing or whether the bridge loans would only be available to those buyers working with a state housing finance agency.)
But HUD spokesman Brian Sullivan told the Arizona Republic last week that HUD had not killed the program and that the withdrawn mortgagee letter was simply a “premature posting.”
In emails with BUILDER this week, Sullivan said HUD should have an update on the tax credit situation “soon,” although he did not provide any more specific dates. With Secretary Donovan scheduled to speak at the NAHB’s spring board meeting in Washington, D.C., on Friday, though, builders certainly will be listening closely for answers on the issue.
Alison Rice is senior editor, online, at BUILDER magazine.
Learn more about markets featured in this article: Washington, DC.