Homebuyers no longer have to wait until after closing to obtain their $8,000 first time buyer tax credit.  Last month, HUD announced that first-time homebuyers using FHA-approved lenders can now get an advance on the $8,000 tax credit and apply it toward their down payments or closing costs right away.

There still is a caveat however.  In many cases, homebuyers must still come up with the FHA mandatory 3.5% downpayment on their own, but can use the tax credit to lower their principal balance and/or pay discount points to buy their interest rate down.  There is a way that homebuyers can still use the tax credit to avoid the downpayment requirement, which is by having the lending institution collaborate with a state housing finance authority or non-profit program to provide bridge loans to allow buyers to borrow against the $8,000 credit and then repay it with their tax refunds.

However the $8,000 first-time homebuyer tax credit is used, it is still an exceptional benefit to assist families in purchasing a home.  Don't forget....the home must be purchased before December 1st of this year to qualify for the tax credit.  Don't wait...and don't be late!