If you remember, a couple of weeks ago HUD announced that the first time homebuyer tax credit of $8000 would now be allowed as an upfront loan that could be used as a down payment. Because of concerns over no down payment purchases in general and down payment programs in the past, that announcement was recalled almost as fast as it was put out there.

The new and improved version is now out. The $8000 can not be used as a down payment. However, you can get taht $8000 up front, rather than waiting and using the tax credit on your 2009 taxes, provided you use it for closing costs.

The details are in a HUD letter on their web site. I'm a little skeptical that this will be a huge boost to the market. Most sellers were already paying a substantial portion of the buyer's closing costs. But I do appreciate that the government continues to look for ways to backstop a tough real estate market.

The HUD announcement that it would allow the $8000 first time homebuyer tax credit to be used for a downpayment didn't last out the week. All mention of it was pulled from HUD's home page.

Apparently the program as orginally discussed looked too much like the down payment gift programs that were essentially eliminated last year because of the higher foreclosure rates associated with those programs.

NAR (National Association of REALTORS) says HUD is retooling the program and that there will still be a way to do this.

Stay tuned to this space for updates.

Last week Shaun Donovan, Secretary of HUD, announced that the Obama administration is coming out with a plan to allow buyers to use the $8000 tax credit up front, as a down payment. The plan will apparently be to utilize FHA to monetize this credit.

Basically lenders that provide FHA loans will be allowed to show an $8000 down payment at settlement, coming from the tax credit. Full details are not yet available, but presumably there will be additional paperwork to sign at settlement acknowledging the source of this financing and waiving the right to the tax credit in the future.

We don't know all the details yet. There may be eligibility restrictions that aren't immediately obvious.

And, of course, some of you will still prefer to have the $8000 tax credit. This appears to be an option. You should be able to take the credit now as a down payment or use it as originally intended for a tax credit on your 2009 income taxes.

More details should be available this week.

NPR had a story this morning on their show, Morning Edition, about how foreclosures are counted.

It turns out that they've been undercounted in rural counties by RealtyTrac, the company everyone's been using for these statistics.

HUD is now responsible for counting these, at least temporarily. I'll be digging into how we look locally with these new numbers.