Government grants can help Americans realize their dream of owning a home.
Federal and state governments offer various kinds of assistance to new homeowners. With a little research, you can find out whether you qualify for grants or other assistance. Although there are several websites and companies that sell lists of government grants, all the information is available for free on government sites.
Homeownership Voucher
The U.S. Department of Housing and Urban Development (HUD) offers a number of grants to promote community development. They also offer some housing assistance for private families or individuals. One such program is the Homeownership Voucher Program. This is only offered in certain states, and applicants must be first-time home buyers and must meet income and employment requirements. The voucher program helps cover part of mortgage or rent for eligible families. To see if it is available in your area, contact your local Public Housing Agency (PHA) (see Resources).
Good Neighbor Next Door
Through the Good Neighbor Next Door Program, HUD offers a 50 percent discount to law enforcement officers, teachers, EMTs, and firefighters who purchase a home from HUD in a revitalization area. If you purchase a home through this program, it must be your sole residence for 36 months or you will have to repay the discount.
PHA Capital Funds Assistance
Under the Quality Housing and Work Responsibility Act (QHWRA), a local PHA can sell public housing rental units to eligible residents. These residents may also qualify for federal grants, distributed through the PHA, to help them purchase their home.
Disaster Assistance
The Federal Emergency Management Agency (FEMA) assists individuals with housing and necessary expenses through the Individuals and Households Program (IHP). To qualify, the President must declare a disaster and authorize individual assistance, and your primary residence must be in the disaster area. You can register for the program online, on the phone by calling 1-800-621-FEMA (3362), or at a disaster shelter.
State Grants
Some states offer individual grants or other assistance to first-time home buyers. For example, as of 2010, the Iowa Finance Authority offers "FirstHome" and "FirstHome Plus" programs. FirstHome is a state-sponsored, fixed-rate mortgage for qualified first-time home buyers, and the plus program includes a grant of up to $2,500 to help with the down paymment, closing costs, and repairs. (See Resources for a list of state sites and current information on grants they offer.)
Loans, Counseling, and Other Assistance
If you don't qualify for a federal or state grant, the government can still help you with your first home purchase. The Federal Housing Administration (FHA) offers mortgage insurance and free counseling to first-time home buyers.
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