The other day I wrote a post on how HUD was going to allow FHA approved lenders to help first time home buyers to use the tax credit up front. The kinks needed to be worked out and the green light has been given to these lenders to develop bridge loan programs that first time home buyers can use towards their closing costs, buy down their interest rate, or put down more then the minimum 3.5% already required for an FHA loan.
The loans cannot be used to cover the initial 3.5% down payment but but will certainly help home buyers. Any way you look at it this will help the home buyer, especially since closing costs on a home around 500k will be roughly 3.5%-4% of the purchase price.
In case you are just finding out about the tax credit it is worth up to $8,000 or 10% of the purchase price. This will be available until December 1, 2009. For more information on how it works you can look back on some of my previous posts or simply Google "first time home buyer tax credit".