Owning a home is a significant milestone, but the financial barriers can be a hurdle, especially for first-time homebuyers.
A first-time homebuyer grant is a financial assistance program that helps individuals purchase their first home. Grants typically can be paid. They can cover down payments, closing costs, or even home improvements.
Thankfully, various housing grants can help offset the costs. Here are ten popular options to consider. Read on.
Top 10 First-Time Homebuyer Grants
Let’s explore the top 10 first-time homebuyer grants that can help you achieve your dream of owning a home.
Also, to explore the wide range of financial assistance options available to first-time home buyer government programs, including down payment grants, low-interest loans, and other valuable resources, visit Housing Gov Grants. This comprehensive platform provides detailed information on various government programs, helping you find the best fit for your specific needs and circumstances.
- HUD’s Good Neighbor Next Door Program
The U.S. Department of Housing and Urban Development (HUD) offers the Good Neighbor Next Door program to assist public servants, such as teachers, police officers, firefighters, and EMTs, purchase homes in revitalization areas.
Benefits
Participants can take a 50% discount on a home’s listing price in a designated area, significantly reducing the financial burden.
Eligibility
To qualify, applicants must commit to living in the home as their primary residence for at least three years.
Application Process
The application involves submitting proof of employment in an eligible profession and agreeing to HUD’s terms and conditions. HUD’s website lists available properties and provides instructions for applying.
2. National Homebuyers Fund (NHF) Grant
The National Homebuyers Fund offers first-time homebuyers a down payment assistance grant to cover down payments and closing costs.
Benefits
The grant can made up to 5% of the loan amount, which can substantially help those who are struggling to save for a down payment.
Eligibility
The NHF grant is available to low—to moderate-income buyers across the U.S. Applicants do not need to be first-time buyers, but they widely use them.
Application Process
Buyers must work with a participating lender to apply for the NHF grant, often used with FHA, VA, or USDA loans.
3. State Housing Finance Agency (HFA) Grants
Each state in the U.S. has a Housing Finance Agency that offers various homebuyer assistance programs, including grants.
Benefits
State HFA grants often provide down payment, closing cost assistance, and favorable loan terms. Some states also offer mortgage credit certificates (MCCs) that reduce the amount of federal taxes you owe.
Eligibility
Eligibility criteria vary by state, but most programs are designed for low- and moderate-income buyers. Some states have special programs for teachers, veterans, and public servants.
Application Process
Buyers must contact their state’s HFA and work with a participating lender to apply. The HFA website typically offers resources and guidance for first-time homebuyers.
4. Fannie Mae’s HomePath Ready Buyer Program
Fannie Mae’s HomePath Ready Buyer Program provides financial assistance to first-time homebuyers purchasing a HomePath property.
Benefits
The program offers up to 3% of the home’s purchase price in closing cost assistance, which can be a significant savings.
Eligibility
Eligible buyers must complete an online homebuyer education course and purchase a HomePath property, a foreclosed home owned by Fannie Mae.
Application Process
After completing the course and obtaining a mortgage pre-approval, buyers can submit an offer on a HomePath property and apply for assistance with closing costs.
5. Federal Housing Administration (FHA) Grants
The FHA provides various programs aimed at helping first-time homebuyers, including down payment assistance grants.
Benefits
FHA grants often cover a portion of the down payment and closing costs, making homeownership more affordable for buyers with limited savings.
Eligibility
To qualify, buyers must meet FHA loan requirements, which include a minimal credit score and a low debt-to-income ratio. The home must also meet FHA property standards.
Application Process
Buyers must work with an FHA-approved lender to apply for a loan and any associated grants. The lender can help identify available grants based on the buyer’s location and financial situation.
6. USDA Rural Development Grants
The U.S. Department of Agriculture (USDA) gives grants and loans to homebuyers in rural areas through its Rural Development program.
Benefits
Eligible buyers can receive assistance with down payments, closing costs, and even home repairs. Some grants do not require repayment if certain conditions are met.
Eligibility
To qualify, buyers must purchase a home in a designated rural area & meet income requirements, which vary by location and family size.
Application Process
Applications are submitted through the USDA’s Rural Development office or a participating lender. The USDA website provides resources to help buyers determine their eligibility.
7. VA Home Loan Program
The VA Home Loan Program benefits veterans, active-duty service members, and their families, including grants for homebuying.
Benefits
The program offers no-down-payment loans, reduced closing costs, and grants to cover certain homebuying expenses.
Eligibility
To qualify, buyers must be eligible veterans or active-duty service members. The VA also considers the buyer’s creditworthiness and financial stability.
Application Process
Eligible buyers can apply through the VA or a VA-approved lender. The process includes receiving a Certificate of Eligibility (COE) and working with the lender to secure a loan and any associated grants.
8. HOME Investment Partnerships Program
The HOME Investment Partnerships Program is a federal block grant program that provides funds to state & local governments to make affordable housing for low-income households.
Benefits
Grants from this program can be used for down payments, closing costs, and even to rehabilitate existing homes.
Eligibility
Eligibility is based on income, and the program targets low- and moderate-income families. Specific criteria and benefits vary by state and locality.
Application Process
Applications are typically submitted through state or local housing agencies, which administer the funds and determine eligibility.
9. Employer-Assisted Housing (EAH) Programs
Some employers offer grants or financial assistance to help their employees purchase a home, mainly if it is near the workplace.
Benefits
EAH programs can include down payment assistance, closing cost grants, or even loan forgiveness, which can significantly reduce homebuyers’ out-of-pocket expenses.
Eligibility
Eligibility is usually tied to employment with a participating company. Some programs may have additional requirements, such as income limits or a commitment to live in the home for several years.
Application Process
Employees should check with their HR department to see if their employer offers an EAH program. The application process usually involves submitting proof of employment and meeting the employer’s specific criteria.
10. Native American Direct Loan (NADL) Program
The Native American Direct Loan program offers financial assistance to Native American veterans and their families for purchasing, building, or developing a home on federal trust land.
Benefits
The program offers no-down-payment loans and reduced interest rates, making it easier for eligible buyers to afford a home.
Eligibility
To qualify, buyers must be Native American veterans or their families. The home must be on federal trust land, and the buyer must meet the VA’s credit and income requirements.
Application Process
Eligible buyers can apply through the VA, which administers the NADL program. The application process includes obtaining a Certificate of Eligibility and working with the VA to secure a loan.
Conclusion
The government’s first-time homebuyer programs provide invaluable support in realizing the goal of becoming a homeowner. You may improve your chances of being eligible for these programs and getting past the financial obstacles in purchasing a home by being aware of your alternatives and taking the required actions.
