Most potential first time buyers know they can receive an $8,000 credit if they close escrow on their home by December 1st when they file their income tax return for 2009 (or file an amended return for 2008). But HUD just announced that the credit can be used immediately for closing costs, or towards the down payment in excess of the required 3.5% down currently required for an FHA loan. Here are specific links with more detail:

1. HUD’s announcement of the plan details.
2. HUD’s Mortgagee letter of instructions (Word Doc file 09-15)
3. The IRS first time buyer rules.