HUD Monetizes New Home Buyer Tax Credit

Housing and Urban Development Secretary Shaun Donovan announced last Friday at the spring board of directors meeting of the National Association of Homebuilders that HUD will permit first time home purchasers to apply the $8,000 tax credit enacted in the stimulus legislation either to their down payment or toward closing costs, rather than merely crediting $8,000 against their income taxes on the next return they file after buying the house or condo. NAHB estimates that this new policy will produce 160,000 new home sales during the time the tax credit is in effect.