Is this legal?

[MissRae]

What is the name of your state (only U.S. law)? Iowa

I was looking for a place to rent some time back and was told of an opportunity to buy the condo for much less than the rent. He told us if we buy the place we can use the first time home buyers tax credit as our downpayment. We were desperate at the time and just jumped into it without giving it much thought. Now I am wondering if this is even legal and what we should do if it isn't. If it isn't how do we get out of it?

I would appreciate any advice.

[private_person3]

Originally Posted by MissRae

What is the name of your state (only U.S. law)? Iowa

I was looking for a place to rent some time back and was told of an opportunity to buy the condo for much less than the rent. He told us if we buy the place we can use the first time home buyers tax credit as our downpayment. We were desperate at the time and just jumped into it without giving it much thought. Now I am wondering if this is even legal and what we should do if it isn't. If it isn't how do we get out of it?

I would appreciate any advice.

Using your $8000.00 tax credit as a down payment is NOT what you will really be doing. What you will be doing is taking a bridge loan for the $8000 and using that towards your down payment.

This is completely legal. In fact, HUD has worked to make it easier for you. Here is a just a little bit of information on the subject:

http://money.cnn.com/2009/05/18/real_estate/tax_credit_as_downpayment/index.htm

Here is some more information about first time home buying in Iowa: http://www.iowafinanceauthority.gov/en/for_home_buyers/firsthome_firsthome_plus/

Good Luck!