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FHA-approved lenders received the go-ahead to develop bridge-loan

products that enablefirst-time buyers to use the benefits of the federal

tax credit upfront, according to guidance from the U.S. Department of

Housing and Urban Development on so-called home buyer tax

credit loans. Under the guidance, FHA-approved lenders can develop

bridge loans that home buyers can use to help cover their closing costs,

buy down their interest rate, or put down more than the minimum 3.5

percent. The loans can’t be used to cover the minimum 3.5 percent,

senior HUD officials told reporters on a conference call. Buyers applying

for FHA-backed financing with an FHA-approved lender that offers a

bridge-loan program can get a bridge loan to bring down the upfront

costs of buying a home significantly but would still have to come up with

the minimum 3.5 percent down payment. The first-time homebuyer tax

credit was enacted last year--and improved upon earlier this year--to help

encourage households to enter the housing market while interest rates

are low and affordability is high. The credit is worth up to $8,000 and is

available to households that haven’t owned a home in at least three

years. The credit does not have to be repaid, and is fully reimbursable,

so households can get their credit returned to them in the form of a