At the time, many Realtors saw the move, however well-intentioned, as disastrous to the housing market. See, while there are, believe it or not, many first time home buyers with excellent credit, they haven’t all saved quite enough for the FHA‘s required 3.5 percent down payment.
What’s more, one of the most traditional sources of down payment assistance; mom and dad’s 401(k), isn’t as plentiful as it once was.
Donovan said the change will help consumers buy a home. According to the plan, the FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. Via this mechanism, eligible home buyers will be able to access the funds immediately at the closing table.