Most grants for first-time home buyers are available through programs that are funded by the United States Department of Housing and Urban Development and administered by individual states. With a bit of research with your state government, you can find out if you qualify for any of these grants. Most of the grants are aimed at people with lower incomes or in certain jobs.
Homeownership Voucher Program
HUD provides money for state Public Housing Agencies to offer housing assistance to private families or individuals. One such HUD program is the Homeownership Voucher Program. This program is not offered in every state and is usually offered through the state's PHA. If you are already participating in the Housing Choice Voucher Program and receive rental assistance through that program, you can use your voucher to help pay the down payment and monthly mortgage on a home. In order to qualify, you must be receiving housing choice vouchers and must be a first-time home buyer. You must also be employed and have a minimum yearly income of no less than the federal minimum hourly wage multiplied by 2,000. Contact your local PHA for more information (see Resources).
Good Neighbor Next Door
This HUD-run program is designed to assist people in certain occupations with purchasing a home in a revitalization area. To qualify, you must work as a law enforcement officer, school teacher in kindergarten through 12th grade, firefighter or emergency medical technician. You must also plan to live in the home as your sole residence for at least 36 months. If you qualify, the program offers a 50 percent discount on the list price of the home. Eligible single-family homes are listed for sale on the HUD site (see Resources).
Down Payment Grants
The Federal Housing Authority provides grants to many private companies around the country to assist qualified home buyers with down payment assistance. For example, the AmeriDream program, the Dove Foundation and Nehemiah are all organizations that arrange for FHA grants of up to 10 percent of the purchase price to low-income buyers for use on a down payment and closing costs. To qualify, in most cases you must have already arranged a mortgage loan through the FHA. In addition, you must meet the income and other requirements of the individual program. Check with the FHA for a program in your area (see Resources).
American Dream Downpayment Initiative
The American Dream Down Payment Initiative is funded through HUD and provides money through individual states to help first-time home buyers with down payments, closing costs and costs of property rehabilitation. To qualify, you must have an income of less than 80 percent of the median income in the area where you are buying the home. Assistance to is generally limited to 6 percent of the property's purchase price, up to a maximum of $10,000. In many states, you also must complete a home-buyer education course to qualify. For more information, contact your state's PHA or department of housing and economic development.
- U.S. Department of Housing and Urban Development Homes and Communities: American Dream Downpayment Initiative
- U.S. Department of Housing and Urban Development Homes and Communities: Homeownership Vouchers
- U.S. Department of Housing and Urban Development Homes and Communities:About Good Neighbor Next Door
- Federal Housing Authority: Down Payment Grants
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