Grants can help home buyers afford their first house.
First-time home buyer programs gained attention during 2009 and early 2010 because of U.S. President Barack Obama's stimulus program. The First-Time Home Buyer Credit, which was worth up to $8,000, ended in April 2010, but house hunters have hundreds of other grants from which to choose to help them move into home ownership.
Function
According to the U.S. Department of Housing and Urban Development, first-time home owner grants can knock down a house's cost to someone's price range. HUD, along with other housing agencies, intends to use programs and grants to help people find places to live and protect them.
As the Miami Herald reported: "The ultimate goal is the same: to save neighborhoods from a glut of neglected, foreclosed homes, condos and town houses; put more property tax dollars in government coffers; and make home ownership a reality for people who may be buying for the first time."
Benefits
At least one Maryland family has experienced the positives of using a grant to buy its first home.
Jasmine and David Sneed and their 6-year-old daughter were having trouble finding a house they could afford in their home of Frederick, Maryland, according to a Frederick News Post report. High housing costs forced them to consider moving as far away as North Carolina. The family of three avoided the interstate move because Jasmine applied for a first-time home buyer program, funded by a local community block grant. The Sneeds received a $15,000 deferred-payment loan and could afford to stay in their home town.
Considerations
No home buyer grant, including those for first-timers, will ever cover 100 percent of a house's cost, according to HUD. Housing agencies usually keep close track of how the money is spent. They are strict about home buyers spending the grant money only on their mortgages. The grant application and writing process can also be extensive and require professional or expert help.
Access
Although HUD doesn't directly administer grants---it funnels the money through state and municipal governments---it does provide access to applications for first-time home buyers. HUD suggests house hunters visit the U.S. Department of Health and Human Services' website for grants (See Resources). The website offers the ability to find any type of government grant, including one for a new home, by searching by key phrases or category, among other options.
Some independent websites offer complete lists and databases that you can search by state or city.
Background
Many first-time home buyer and other housing grants are results of America's economic recession.
HUD used money from the American Recovery and Reinvestment Act of 2009 to create the Neighborhood Stabilization Program to help stabilize the housing market.
States, local governments and nonprofits compete for the grant money. The Recovery Act provided $50 million for HUD to distribute, according to the department's website.
Tags: home buyer, first-time home, home buyers, afford their, could afford