Besides the usual mortgage application information, the lender is likely to require some extra paperwork from you, based on FHA guidelines:
-- A filled-out IRS Form 5405, which is your request to the federal government to send you a tax credit check. You can file an amendment to your 2008 return and get the credit within a matter of weeks, or you can file for it on your 2009 taxes. Most buyers are expected to opt for the amended return route. Form 5405 is available for download at www.irs.gov.
-- Proof that you have no outstanding civil judgments, liens, unpaid taxes or other obligations that could reduce or eliminate the tax credit you're seeking.
-- Confirmation from your employer that you are not subject to wage garnishments, which could also affect the amount of the credit.
To compensate for providing you tax credit money in advance, your lender will be strictly limited on what it can charge. According to FHA guidelines, fees must be "reasonable" and "nominal" -- generally no more than 2.5 percent of the expected tax credit. For example, if you're in line to receive the full $8,000 credit, that would mean that the most you could be charged for the cash in advance typically would be $200.
A senior HUD official said the agency wants to keep these fees as low as feasible to avoid abuses or gouging, and will be monitoring transactions to make sure participating lenders are adhering to the guidelines.
Though many lenders are not yet up to speed on the new monetization program, at least some say they are enthusiastic about taking part. Scott Stern, CEO of Lenders One, a national cooperative of more than 125 mortgage firms and the ninth highest-volume loan originator in the country, said "100 percent" of his member firms will offer the monetization once they digest the administrative details.
"We think it's a great thing to simulate the economy and get housing moving again," he said in an interview.