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The US government will launch a new tax credit scheme to help first home buyers who are struggling to raise sizeable deposits.
As part of existing stimulus measures, US Congress has offered first home buyers a tax credit of 10 per cent of the purchase price, or up to US$8,000 ($A10,150), however the credit is not available until tax time.
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In order to speed up first home buyer activity the government is now looking to work with Federal Housing Authority (FHA) approved lenders in order to make the credit available to first home buyers upfront, as a sort of bridging loan, CNN reported.
"We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a down payment," Shaun Donovan, Housing and Urban Development secretary said.
According to the National Association of Realtors, the average American first home buyer has only enough to cover a 4 per cent deposit.
