The first time buyer credit is not allowed if the buyers financing is from tax-exempt mortgage revenue bonds. Does USDA rural housing loans fall under that? I have had one lender say "yes" another does not know. I have one client who is in the process of buying a home who was counting on the credit who is getting a USDA loan, now I an wondering if he will not be eligible for the credit.
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Don't know much about either, but after a quick search, looks like the USDA provides guarantees on the home loans under their program, whereas the tax exempt mortgage revenue bonds actually provide mortgage financing for borrowers, and tax free income for investors, so the two programs seem different from one another. -
Under the new law for purchases in 2009 tax exempt revenue bond financing is acceptable.
From Division B Section 1006:
(e) REMOVAL OF PROHIBITION ON FINANCING BY MORTGAGE REVENUE
BONDS.—Section 36(d), as amended by subsection (c)(2), is
amended by striking paragraph (2) and by redesignating paragraphs
(3) and (4) as paragraphs (1) and (2), respectively.
(f) EFFECTIVE DATE.—The amendments made by this section
shall apply to residences purchased after December 31, 2008.Last edited by solomon; 03-11-2009, 10:15 PM.Comment
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