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You’ll recall that HUD Mortgagee Letter 2009-15 was issued earlier this month and then repealed.  It’s now been reinstated.   The policy allows the home buyer to use the $8,000 tax credit as collateral for a loan used for closing costs, pre-paids, and down payment.   To secure repayment of the amount advanced, the buyer would grant a second mortgage to the lender in the amount of the credit advanced.  Essentially, it lets the borrower tap into the $8,000 at closing, rather than wait for the credit when the borrower receives his tax refund.   A link to HUD’s website and the letter from May 29, 2009 is http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-15ml.doc

Here is the link to HUD Mortgagee Letters. http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/

-Jamie Larkin