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The homebuyer tax credit has been extended to June 30, 2010. An FHA mortgage can help buyers who have little cash for covering a down payment and closing costs. With continuing low mortgage rates, it's time to buy.

FHA Loans and Homebuyer Tax Credit Help with Buying Your First Home

Home buyers and some current homeowners received good news as Congress extended deadlines and eligibility for the program to include those who have owned their homes for 5 consecutive years of the last 8 years. Eligible home buyers have until April 30, 2010 to sign a purchase contract, and until June 30, 2010 to close. The tax credit, when combined with lower home prices, an FHA home loan, and current low mortgage rates, can provide buyers with optimal opportunity for finding a new home at great value.

FHA Loan Limits Higher in More Expensive Areas

In some cases, FHA loan limits are higher than those of conventional loans. FHA mortgage limits range from a low of $271,050 to a high of $729,750, while conventional Fannie Mae and Freddie Mac loans are generally pegged at $417,000. You can find FHA mortgage limits in your area on HUD's Web site.

FHA Guidelines Allow Low Down Payments and Options for Closing Costs

First time buyers are frequently low on cash, and with recent drops in home values, current homeowners may find that they cannot sell their present homes for enough to put down the 10- to-20% typically required by conventional mortgage lenders. FHA loans allow as little as 3.5percent down, and also permit homebuyers a choice of how they handle closing costs:

  • Buyers may pay closing costs "up-front""
  • Allowable closing costs can be rolled into the loan amount
  • Lenders pay closing costs in exchange for charging higher mortgage rates.

Don't miss out on this opportunity for buying an affordable home. Real estate agents and FHA approved lenders can answer questions and help you find and apply for an FHA loan.

Karen Lawson
Karen Lawson is a freelance writer with extensive experience in mortgage banking and home loan loss mitigation programs. She holds BA and MA degrees in English from the University of Nevada, Reno.