Learn About First Time Home Buyer Grants

For many people, purchasing a home is an important goal that is worked towards for years. Even with planning and saving, it can be difficult to be able to save enough money to be able to afford a down payment or the other costs associated with buying property.

To help families and individuals purchase their first home, there are several different state and federal programs that subsidize part of the purchase price and processing fees. These grants and tax breaks are often available to applicants who may not qualify for private financing options from banks and other institutions.

Many of these first time home buyer grants are available to Individuals and families living anywhere in the country. Applicants can look into grants from the Department of Housing and Urban Development (HUD) and special financing options from HUD’s Federal Housing Administration (FHA).

Other applicants access the funds they need to purchase a first home by receiving tax credits from the Internal Revenue Service (IRS) or the Good Neighbor Next Door program. Read on to learn more about housing grants for first time home buyers.

Find Out About First Time Home Buyer Grants from HUD

The Department of Housing and Urban Development offers home buying grants specifically geared towards individuals and families that have never purchased a home before.

HUD offers these grants to applicants who would most likely not be able to receive a regular mortgage from a private lender due to having a poor credit history or other monetary problems. HUD grants can also help applicants make lower original down payments.

Applicants must be able to demonstrate meeting certain eligibility criteria before they can apply for a First Time Home Buyer Grant from HUD. Applicants for HUD housing programs or assistance will be required to attend a financial education course before they will receive any aide.

Discover Financing Options from the Federal Housing Administration

The Federal Housing Administration (FHA) is the division of HUD which is dedicated to helping first time homebuyers receive the financing they need to afford a property. FHA-backed loans are generally available at a more favorable rate than loans that many first-time property owners would receive if seeking financing from a private lender.

Applicants for FHA funds should note that the FHA does not directly offer any type of financing to consumers. Instead, it insures mortgages offered by certain lenders so that the lender can offer the loan at an affordable rate to the applicant.

The FHA also has its own real estate market where it sells homes at a semi-subsidized price. Individuals and families that receive funding through a federally-sponsored program are required to attend a financial counseling class to help ensure that they will be able to meet the obligations of having a loan and owning a property. This requirement applies to all grants and loans provided by HUD and its subsidiaries.

Learn About Homeownership Voucher Program Grants through the Internal Revenue Service

Many first time home buyers also turn to the Internal Revenue Service (IRS) for a tax credit through the Homeownership Voucher Program.

The Homeownership Voucher Program offers new property owners that have completed a qualifying purchase significant tax relief in the form of tax breaks and credits. This program is geared specifically towards lower-income families and applicants currently living in public housing.

Vouchers received through the IRS first time buyers program can contribute towards the cost of buying a new home in a couple of different ways. Some families use the vouchers to help pay their monthly mortgage costs. Other recipients choose to use the funds to offset other household expenses.

In order to be eligible for a HUD Homeownership Voucher, applicants must meet the following requirements:

  • Be a first time home buyer according to HUD regulations
  • Complete a HUD homeownership counseling education program
  • Meet the minimum income requirement set by the applicant’s local housing authority
  • Include at least one adult included in the household who has worked full time for at least one year

Discover Home Buying Help through the Good Neighbor Next Door Program

Firefighters, K through 12 teachers, emergency medical personnel, law enforcement officers and other similar categories of civil servants can receive help buying their first home through HUD’s Good Neighbor Next Door (GNND) program.

The GNND program can help eligible individuals and families receive significant discounts on the price of their first home or even purchase a home directly from HUD. All recipients of GNND aid must use the property as their primary residence for a period of at least three years following purchase.

The GNND Sales program helps applicants buy a first home in areas designated for revitalization around the country. In order to qualify, HUD requires applicants to follow set instructions and submit a request for a property within seven days of its listing.

Homes that receive multiple bids will be allotted to the winner of a lottery from amongst the applicants. Applicants should note that they will be required to sign a second mortgage for the amount of the discount received which will be canceled after they fulfill the 36-month residency requirement.

Learn About Home Financing Options for Veterans

Veterans of the U.S. armed forces are eligible for special financing options when purchasing their first home. Depending on the veteran’s situation, she or he may be eligible for mortgages are more favorable rates through the Department of Veteran Affairs (VA). Active members of the military are also eligible for various HUD and VA programs that help supplement the cost of purchasing a first home.

Veterans with sustained disabilities due to their service may also be eligible for or a Special Housing Adaptation (SHA) grant or Specially Adapted Housing (SAH) funds. SAH aide helps veterans with disabilities live a barrier-free life in whatever ways possible.

SHA grants are specifically geared towards helping veterans be able to afford housing that includes any special accommodations for their disability. Both SAH and SHA funds will require applicants to prove that they have a sustained disability that needs lifelong support or accommodations.

Individuals and families who have never purchased a home before should look into all of the above-mentioned financing options that they think they may qualify for. Questions about specific programs or loans should be directed to the organization overseeing that program.