Many potential home buyers are prevented from purchasing a home because of financial constraints. But with the wide variety of grants available through governmental and nonprofit sources, some people can qualify for help with down payments, government loan programs with low interest, or programs with little to no down payment or reduced closing costs, putting the dream of home ownership within reach.
Function
Grants for purchasing homes are generally administered by state and local government agencies or private nonprofit organizations. There are two main types of programs available: those providing financial assistance with down payments or homes at a reduced price, and those that help home buyers obtain favorable mortgage loan terms, ultimately reducing the cost of home ownership.
First-Time Homebuyers
Many of the programs providing grant funding for prospective home buyers require that you be a "first-time home buyer." This usually means that you have not owned a home within the last three years, even if you have owned a home at some point prior. As with many types of grants for purchasing a home, there could be income requirements. This will generally be a percentage of the median income in your area. First-time home buyer grants provide financial assistance for down payments or reduce the amount of money necessary for down payments and closing costs.
Veterans
One of the benefits of serving in the military is potential eligibility for the Department of Veteran Affairs Loan Guaranty Program. This program helps veterans to purchase homes by guaranteeing a certain proportion of the loan, meaning that banks will consider financing your home purchase less risky, increasing your chances of being approved with a smaller down payment and lower interest rates. To qualify for this program, you must be a veteran of the United States military or the spouse of a veteran who died as a result of his or her service.
Occupation-Specific
Look for grants available in your area based on your profession. The most well-known of these programs is the U.S. Department of Housing and Urban Development Good Neighbor Next Door Sales Program. This program offers houses at a 50 percent discount to members of law enforcement, kindergarten through high school teachers, firefighters and paramedics. Homes available through this program are located in designated revitalization areas (areas with lower household incomes and rates of home ownership).
Finding Grants
The best first step in finding a grant to purchase home is to contact a Department of Housing and Urban Development office in your area. HUD workers will most likely know about the specific programs available in your area and can tell you where you can receive low-cost or no-cost housing counseling. In addition to contacting HUD, search an online database of housing grants like that found at grants.gov.
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