The Continuing Saga of the $8,000 Bridge Loan

by J. Craig Anderson – May. 20, 2009 12:00 AM
The Arizona Republic
A U.S. Department of Housing and Urban Development official said Tuesday that HUD would move forward with a plan to let first-time homebuyers use the currently available tax credit of up to $8,000 as collateral for “bridge loans” to cover the down payment on Federal Housing Administration-insured mortgages.
HUD spokesman Brian Sullivan said Phoenix-area lenders misinterpreted the department’s withdrawal of an official communication, known as a “Mortgagee Letter,” announcing the program last week.
“There was a premature posting of a Mortgagee Letter,” Sullivan said to explain the withdrawal, adding that the program’s details had not been finalized.
Sullivan would not say when the bridge-loan program would be initiated, or whether it would be substantially different from what originally was announced.
A week earlier, real-estate agents and home builders had issued statements supporting a HUD proposal to let banks, non-profit organizations and local governments offer short-term bridge loans to cover the down payment for first-time buyers eligible for the tax credit.