$8,000 First Time Homebuyer Credit- as good as it seems?

If you read the paper, you will have noticed on Thursday in the Chronicle Business section the article stating ‘A break for first time homebuyers ‘. Well…….there is a catch. Isn’t there always? Last month, the legislators came up with a feel good plan for buyers to access this $8,000 before they actually earned it. What a shocker! They now made it possible , in theory, for buyers to access these funds for closing costs (only) when they buy the house, not having to wait until next spring when the return is filed. The issue since this was released is ‘ WHO’ is going to forward this money? No agencies have really stepped up. There have only been a few. So as of this week, the State of Texas (via the Texas Dept of Housing and Community Affairs – TDHCA), will make that possible. BUT WAIT!!! Let’s look at the fine print. First, it says ‘some ‘ of the tax credit. Second, only 700 borrowers for the first wave of approved money. And thirdly, the most important, is it has to be paid back within 90 days to remain interest free.

Well, let me give you a hint here. If the people using it today for buying a home could afford to pay it back within 90 days, do you think they would take this in the first place? So what we will have is yet another quagmire of a government agency earmarking some federal money to this program, in hopes people pay back in the 90 day period, and when they don’t, the program will freeze because they have no more money to advance.

I am not sure you really want to know my thoughts about this. But I’ll give it a shot. You can stop reading if you want to. WHY CANT WE ALL JUST BE COMPLACENT WITH THE DELAYED GRATIFICATION OF ‘ FREE’ MONEY IN 2010? Why do we have to look for ways to get ourselves in trouble with borrowed/advanced funds, yet again?

Rates are down this week! Hip Hip Hooray! The reason? Do we really care? Soon enough we will own the bragging rights of having an interest rate below double digits, or won’t we? That remains the million dollar question. In summary, they are low, so get out there and spend it.