Tuesday, April 28, 2009

No you can't use the tax credit as a down payment.

I keep seeing this pop up as a "I just came up with this great idea" post around the internet. Just to be absolutely, 100% clear, You may not file for the tax credit and then use it for a down payment. Don't take my word for it, from the IRS:
Q. I am in the process of buying a home. I expect to close the deal before December 1, 2009. Can I claim the first-time homebuyer credit now? That would allow me to use the refund for a down payment.
A. No. You may not claim the credit in anticipation of a purchase that has yet to happen. Until you have finalized the purchase of your home, which for most purchasers occurs at the time of the closing, you do not qualify for the credit. IRS
news release 2009-27, First-Time Homebuyers Have Several Options to Maximize New Tax Credit, contains details for filing options if the home is purchased after April 15, 2009.

1 comment:

Maggie Knowles said...

5-30-09 - you can now, see:

"...under the terms of today's announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate."