Government Grants For First Time Home Buyers: Unique Value Realized

couple admiring new home financed by government grants for first time home buyers

The Top Government Grants For First Time Home Buyers

Do you have your eye on top government grants for first time home buyers but are unsure of the details?  Well keep reading and we will bring you up to speed.

Buying a home can seem like an impossible dream these days. Real estate is more expensive than ever, and it’s hard for people to save up the 20 percent necessary for a down payment.

sign with red arrow grants cafe

The good news is that you don’t necessarily have to take out a huge loan to purchase a home. Depending on your situation, you might qualify for one or two government grants for first time home buyers.

Before you sign on the dotted line, do your research to find out if you qualify for extra assistance. We’ve rounded up some of the top programs for you here.

Read on to find out more about the top seven first time homeowner government grants.

1. USDA

USDA loan offers can be very helpful programs for first time home buyers looking to buy. But did you know that they also have grants for home purchase available to potential buyers?

These housing programs are meant to assist people who want to live in rural areas of America. So if city living is more your style this program is not for you. However, you don’t have to live on a farm, though.

Assistance is income-based for these new homeowner grants. They’ll use the median income of the area where you’re looking to buy to figure out if you’re eligible for help. Once you’ve purchased a house, you can apply for a grant of up to $7500 for necessary repairs.

Whether you’re buying or building, you can take advantage of this program.


Watch This Short Video About USDA Down Payment Assistance


 

2. First Home Club

Buying a house in New York? Then you might want to look into the First Home Club, which awards up to $7500 in assistance.

Quontic Bank in partnership with the Federal Home Loan Bank of New York runs the program. In fact, if you have some money saved for a down payment already and find yourself just a bit short, this program will help match your funds.

You’ll have to plan ahead to access this program since it’s necessary to open a savings account with the bank to receive the matched dollars.

real estate agent handing house keys to first time home buyer

For every dollar you deposit, they pledge four. The money can also be used for closing costs if needed.

It’s worth noting that this program means you can only have your mortgage funded by Quontic.

3. Local Programs

Similar to the First Home Club, it’s always a good idea to research local programs. Your state or city might have government grants for first time home buyers available.

Most of these programs will take your income into account. They are location specific. These government grants to buy a home usually exist because they want you to purchase in that area, so make sure you read closely.

It’s also a good idea to read the fine print. There are some programs that will require you to pay back the grant if you move out of the home too early.

4. Good Neighbor Next Door

This program from HUD is for homebuyers looking to buy a home in a revitalized area. Since its goal is to help rebuild certain places, you can take advantage of it even if this isn’t your first time buying a home.

However, there is an occupational requirement here.

two houses side by side in neighborhood

The Good Neighbor Next Door program is only available to people who work as law enforcement officers, firefighters, EMTs, or teachers. If this describes you, that’s good news — you could qualify for a 50 percent discount on the price of your home.

The program is available in multiple states, and you can easily search for participating areas on their website.

5. Fannie Mae and Freddie Mac

Fannie Mae and Freddie Mac might sound like nicknames, but they’re actually the names of government-sponsored programs. Their Conventional 97 loan program helps first-time homeowners buy a house without having to put down a lot of money for a down payment.

If you qualify for this program, you could put down as little as three percent of the total cost of your future home. It’s meant to help increase the number of mortgages that are being offered in the US by making them easier to afford.

While this is technically a loan, the down payment is allowed to be a gift from a friend or family member.

6. National Homebuyers Fund

The NHF offers government grants for first time home buyers in multiple states, like some of the other programs on this list. Their Down Payment Assistance programs don’t have to be repaid.

They’ll give you up to five percent of the loan amount, which you can put towards either your down payment or your closing costs. You’ll have to find your own lender, but this could help significantly reduce the amount of debt you’d go into by buying a house.

There is an income requirement, but it varies based on where you want to buy a home.

7. VA Assistance

Finally, there are of course programs available to assist veterans in purchasing homes. The U.S. Department of Veterans’ Affairs will help you buy a home if you’re active duty, a vet, or a military spouse.

sign next to us flag reads thank you veterans

Most people are familiar with the VA loan that helps you buy a house without a down payment. This is incredibly helpful, but it’s still technically a loan.

Disabled veterans can apply for an Adapted Housing Grant. This program provides assistance for buying a home completely suited for their disability.


Watch This Short Video That Explains The VA Adapted Housing Grants Program

 


Members of the military should always check to see if the VA offers some sort of assistance for their mortgage situation.

Learn More about Government Grants for First Time Home Buyers

Getting the finances to buy a home is difficult. With these seven federal programs for first time home buyers, you can find yourself one step closer to being a homeowner.

Whether you’re renting or about to close on your first home, it’s always important to know your options. Learn about government grants for home buyers, refinancing a mortgage, improving your credit and more on our website.

Credit Squared is dedicated to helping everyone master the world of personal finance. Stay updated on all of our latest advice!

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6 Comments

  1. The state and local programs for first home buyers are pretty amazing.

    I have seen programs where they will offer up to 20,000 dollars to the down payment with the stipulation you must stay in the house 5 years to keep the grant.

    HUD homes work similarly where you can get an unrealistically low price if you live there for at least a year.

    • Absolutely Tony!

      There are many state and local government grant programs available for first time home buyers.  These programs offer government grants to apply towards a down payment for fairly large sums.  They don’t have to be repaid if you stay in the house for the required time period.

      They are not hard to find. Just contact a local lender you trust and they will see if you qualify. If you do they will help you get into the right program.

      All the best.

  2. I didn’t realize all the resources available out there to assist in purchasing a new home.

    I was fortunate enough to use a VA loan to purchase my home. But I wonder if I could have received other help had I done more research before buying.

    To any new home buyer, I recommend you follow the suggestion on this site and research options before signing on the dotted line.

    • Ty,

      There are a ton of great government programs out there right now.  Many government grant programs for first time home buyers can get a buyer into the home of their dreams.

      Down payment assistance programs can help a buyer with very little resources get into a home with grant money provided by government assistance.  

      The program has requirements however, like staying in the house for five years. That should be easy to do, as the average life of a mortgage is 7 years.

      These programs are really easy to find as most mortgage bankers offer them to those that quality.

      Check locally with a mortgage lender you trust to see which programs are available in your area.

      All the best.

  3. This page is just what I need! I’ll be moving very soon and I have been thinking about the first time home buyers programs but I’ve been so overwhelmed about making the wrong decision.

    I’ll have to bookmark this page and look at each one of those programs that you’ve listed. I’m still deciding if I want to rent or purchase a home of my own so this is something I’ll have to take the time to reread again.

    Thank you

    • Don’t worry about making a wrong decision.  Buying a home is an investment in your future and with all of the available government grants for first time home buyers, it’s really an easy decision.

      The best thing to do is search around for available programs in your area.  A mortgage lender can help you and a simple search on Google will lead you to a wealth of information. I’ve listed several programs in this article that you could easily pursue.

      Renting is okay if you are just starting out, but if you have the means, I believe you should pursue home ownership. These days rents in many areas are much higher than a mortgage payment and you can use the benefits of the tax advantage.

      Best of luck.

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