ST. LOUIS-The president's $8,000 tax credit has yet to significantly affect activity in the first-time homebuyers market, the head of a leading mortgage lender cooperative said.

There was a lot of enthusiasm when the news announcing the tax credit first came out, said Scott Stern, chief executive of Lenders One here. There was a break as the industry looked into ways that those first-time homebuyers could monetize that tax credit.

Given that it is a recent development, it has not resulted in a lot of first-time homebuyer activity.

But what really is holding buying activity back is that potential purchasers are still concerned about home prices and that in a lot of markets, the fear is prices have not bottomed out yet.

In talks with some of his member companies, Mr. Stern said those firms are using the tax credit as a selling point, they are marketing it with their Realtor referral partners, but at this point, the tax credit is not responsible for a lot of new loan applications.

"I expect that through the summer selling season, my member companies will continue to promote it and it will have activity in marketplaces where there is home price stabilization," he said.

Still, even without the full effect of the tax credit, the first-time buyer market is considered to be one of the more active parts of the business. Mr. Stern noted that these people are able to enter the market without having to worry about a house to sell.

"The biggest challenge right now in purchasing a home is selling your existing home," he said, adding he talks with a lot of people who said they would love to buy a house right now. People who are current homeowners see the opportunity to purchase a larger property because of lower prices and lower interest rates.

But what is holding these people back is that before they can go after that new home, they need to sell their current one first. First-time homebuyers can take advantage of those same market conditions, without the drag of needing to dispose of an existing property, as long as they meet the tighter underwriting guidelines of today.

These buyers, Mr. Stern added, are being very strategic and using all sorts of tools to shop and compare prices. They are also willing to negotiate to get the best prices. "I would tell people, if you were a first-time homebuyer and you can qualify for a loan, you should buy immediately," he said. The one reason people are not buying now is that they think prices are going to go lower.

He said he would tell someone not to try and time the market; you are likely to miss the bottom and end up buying at a time when prices are increasing.

Right now, most first-time buyers are applying for Federal Housing Administration-insured loan products, but there are some, who have money for a downpayment, going after conventional financing.

The often-overlooked Veterans Affairs product is another option, especially now that there are a lot of American military personnel returning from overseas and entering the homebuying market. Mr. Stern doesn't have any statistics on how much of Lenders One VA production is for first-time buyers, "but to me, if you are veteran returning from active duty or serving in the reserves, a VA loan is the best place for a first-time homebuyer, given the no downpayment requirement and favorable underwriting compared to conventional."

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