Couple thoughts: First off, I have asked around to a number of my friends who are still in the tax world and every one of them has indicated to me just how easy and effective it has been for their clients to get back the $8,000 tax credit. Basically, you just file an amended 2008 tax return (only have to deal with this one issue), e-file it, and ask for automatic deposit to your bank account. Monies are there within 2 weeks, if not sooner.

Second, with this in mind, it makes the use of the “up-front” downpayment, etc., assistance a very expensive use of money. Because the provider of the “up-front” assistance will be allowed to charge 2% (or, 2 1/2%) to process the loan, it equals about a 52% annualized interest charge (2% times 52 weeks in a year, divided by 2 weeks to get refunded). I tell my clients, “If you can get the money through savings or a gift, you are much better off.” (Amazing, how my clients end up doing a gift back to the donor for an amount that, coincidentally I am sure, equals the exact amount gifted to them…)

As an aside, I do not know of any one making these loans in the Phoenix area at this time, either.

Finally, yes, I definitely believe the $8,000 tax credit has had a positive impact on the housing market, even if it is concentrated in the $200,000 and below niche. Remember, there are income limits attached to it, so not sure how that would work in expanding it to everyone as those looking to buy $400,000 homes tend to make higher incomes (or, at least we hope so…:) ).

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