On May 12, HUD Secretary Shawn Donovan announced to a group of REALTORS that very soon they would have an option for HUD borrowers to monetize the $8,000 tax credit at the closing table. That was almost a month ago, and now we hear that officially you can use the money for "some" closing costs.
The gist of it is that you still have to have the minimum 3.5% down payment in order to close. NAR just released a great 8 page booklet on the credits as of the end of May. So it's factual and timely.
Download Government_affairs_tax_credit_brochure_052709
If you don't like this book or perhaps don't want to trust something published by NAR about taxes, the best direct resource is www.irs.gov. Just type in First Time Home Buyer tax credits on their page and plenty of info will show up.
