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How to Get $8,000 For Your Down Payment

There's no end in sight for economic stimulating efforts. A recent revision to the first-time homebuyer credit makes purchasing a home this year even more appealing than it was when the original version was announced in February.

While the original credit would give eligible buyers an $8,000 credit on their next tax return, the revision permits buyers to use the $8,000 for a down payment.

To learn about the nuances of using the cash for a down payment,


While the down-payment option is quite appealing for many buyers who may not otherwise be in the market, there are limitations. Find the main points about monetizing the $8,000 credit below.

  • If you're eligible for the homebuyer's credit, you may use the credit amount to secure a piggyback or bridge loan from private lenders, state housing agencies, or through some nonprofit groups. That loan would then be used toward your down payment.
  • The credit may only be used in connection with FHA financing. Those loans require a down payment of at least 3.5 percent, which the buyer must come up with on their own or through certain state and local housing agencies. The $8,000 credit would be applied after the 3.5 percent minimum has been met.
  • No matter how you choose to use the tax credit (down payment, closing costs, etc.) you must have purchased your home before Dec. 1.
  • Colorado, New Jersey, and Ohio have launched state programs that provide bridge loans to buyers wishing to take advantage of the down payment option.


Join The Conversation
Smart-Living Smart-Living 8 years
Modus - The motivation behind using the $8,000 for a larger down payment beyond the minimum 3.5 percent is to reduce monthly mortgage costs.
gonedelirious gonedelirious 8 years
I just bought and my mortgage payment is $55 dollars more than my rent payment was. There is a local program that gave me $7000 help with down payment & closing costs, but there is a minimum down payment that they also require you put down (to make sure that you are able to do this). They go over your finances at great length. It is a second loan, that I don't repay anything on. At the end of each year they repay $700 & at the end of 10 yrs I won't owe them anything. They are just helping first time homebuyers in this scary time. And I still have to amend my taxes to get the extra $8000.
Spectra Spectra 8 years
3.5% is all you need? WTH? We rented for 2 years, despite lots of pressure to buy, buy, buy right away. We saved for a 20% down payment so we wouldn't have to do the whole PMI thing and deal with all that stuff. I thought the $8K was supposed to encourage people who CAN afford to buy a house to do so; not to get another batch of people that really can't quite afford a house to jump into a mortgage.
Modus-Vivendi Modus-Vivendi 8 years
But then again, I'm confused about the above line about having the buyer have to come up with 3.5% and then adding the $8,000 on top of that. If 3.5% is the down payment required, are some people just putting an extra $8,000 down just because?
Modus-Vivendi Modus-Vivendi 8 years
Savvy, I understand how it works, but I'm saying that another way to get your down payment together would be to do it the old fashioned way: save up! If you're not responsible enough to save up a measly 3.5% down payment, then it seems like perhaps you're not ready to buy a house.
Smart-Living Smart-Living 8 years
Modus Vivendi- You get the $8,000 initially from a loan, but pay it back as soon as you receive the credit from the government. So It helps people who might not have enough in savings right now to make a down payment, but they'll have the funds to pay it back.
syako syako 8 years
It's scary that one only needs 3.5% down.
Modus-Vivendi Modus-Vivendi 8 years
Or you could just put money away in savings. Didn't we get into this mess in part because we let people buy homes who couldn't afford a down payment?
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