First-time home buyers have a lot of questions. Many of them can't see beyond the cost of what it will take to the path to home ownership. These same current and potential home buyers might not be aware of the mortgage grants available to them to offset some of the costs of getting into a home. There are many resources available to first-time home buyers.
Types
Mortgage grants come in two forms: those that must be paid back over time, or "free" money grants. Different requirements must be met to qualify for either.
Loan Types
First-time home buyer grants are only eligible for government-subsidized or insured loans. The best example of these are FHA and VA loans.
Fees
The fees covered by first-time home buyer grants are for down payments, closing costs and pre-paid items. Down payment requirements can be as low as 3 percent. Closing costs are tied into lender and title fees, and pre-paid items are items such as property tax and homeowner insurance that must be paid in advance for up to three months at closing.
Income Limits
All first-time home buyer grants have income limits attached. Families earning over $150,000 per year in combined income are typically not eligible for first-time home buyer grants.
Credit Requirements
Home buyers who have defaulted on government loans in the past, or who have credit scores below 620, don't qualify for first-time home buyer grants. Additionally, home buyers who have had a bankruptcy that has not been discharged are automatically denied for first-time home buyer grants.
Geography
In addition to federal programs that offer assistance to first-time home buyers, there are state and local programs as well. It's important to research all available options before choosing a solution.
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