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Are you a first-time homebuyer? Apply your 2009 tax credit to your downpayment!

U.S. Housing and Urban Development (HUD) announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the 2009 $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home, a new development that will hopefully help to stabilize the nation's housing market by stimulating home sales across the country.

The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Typically, families can only access this credit after filing their tax returns with the IRS, but now state Housing Finance Agencies and certain non-profits are allowed to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate.

For more information for home buyers or to find a FHA lender in your area, visit http://www.hud.gov/buying/index.cfm.