Don't you just LOVE the $8000.00 first-time home buyer tax credit? I'm sure I will get a variety of answers to that question. If you are buying you SHOULD love it and if you aren't your answer will vary based on your political opionons. Regardless, it is a really great tool that has been instrumental in the "jump-start" of real estate again in the good old USA.

There is a lot of buzz out in the real estate world right now about the first time home buyer tax credit being used as a down payment.

 As things are right now, you don't get the tax credit until after you close so you can't use it as a down payment unless you can get mom and dad to "float" you the money for a few weeks. This is completely legal and ethical, and we are seeing many home buyers do just that. Those that don't need the money as downpayment are spending it on home repairs and upgrades.  

Essentially, your family would have to give you a "gift" and then have you pay them back with the money from the tax credit.

There are plans in the works to change that rule and provide a way for buyers to used the tax credit as a down payment, applicable at closing. It would have to work in a similar fashion, since Uncle Sam is not going to send you 8 grand until you prove that you have purchased a home, but may provide a way for buyers to cut the "gifter" out of the picture. 

I want YOU to buy a house!

There are some kinks yet to be worked out because lenders don't want to be left holding the bag if the buyers don't repay them with the tax credit. I don't blame them...

In whatever form it comes it will be a welcomed addition and hopefully provide many more first time home buyers the means to not only purchase a home, but to do so in a more "cautious" manner than we saw in the previous hyped-up, $0-down-driven real estate boom.

Thoughts? Questions?

Blake Bench is a professional mortgage planner with Bank of America in St. George, UT. He can be reached at (435) 705-4128 or