There are various state and federal grant funds available to U.S. first time home buyers through the United State Department of Housing and Urban Development (HUD) and various state agencies. Federal grants are normally given to states or organizations, which in turn give them to eligible home buyers to use towards repairs, energy savings improvements or down payments and closings costs in connection with purchasing a home.
Federal Housing Grants
The federal government offers grants through HUD’s Office of Affordable Housing Preservation (OAHP) to eligible property owners who are interested in investing in energy and green retrofit improvements to their property. To apply for a federal grant, you must register at the grants.gov website and you can also or go to the HUD website to see what other types of grants may be available.
The U.S. Department of Veteran’s Affairs (VA) administers housing grants and loan programs that are available to all disabled veterans and service members to help them and their families. Under The Temporary Residence Adaptation (TRA) Specially Adapted Housing section 2101 (a) (SHA) or the Special Home Adaptation section 2101(b) (SHA) grant program, eligible persons may obtain a grant to help them and their family purchase or build a home for their special needs. Eligible persons can apply for the grant up to three times as long as they have not exceeded the maximum award. Under Section 2101(a) SHA, eligible veterans and members may use up to $14,000 to adapt their home. Those eligible under the 2101(b) SHA grant may use up to $2,000. Previously, grant funds were only available for a one time grant award. The VA also offers VA guaranteed home mortgage loans through approved lenders.
The VA also offers VA guaranteed home mortgage loans through approved lenders. VA loans require zero down payments for veterans and service members who are purchasing a home as their primary residence. VA loans have competitive interest rates and terms. To find out if you are eligible for a VA grants and/or loan, visit the VA website.
State Low to Moderate Income Grants
Many states offer grants to first time home buyers of low to moderate incomes. Grants may range from $5,000 to $10,000 or 0% interest low fixed rate second mortgages may also be offered on average up to $10,000 to assist them with down payments and closing costs. Some loans do not need to be repaid until the home is sold, refinanced, paid off or the homeowner no longer lives in the home. Other loans are low interest and can be paid over a 10 year period. Developers may set aside certain grant monies they receive from government agencies to help borrowers with down payments as well. There may also be grants and loans available to non-first time home buyers who are renovating or purchasing an energy efficient home or upgrading with energy efficiency materials and appliances. The best thing to do is to check with your local agency to find out what types of grants and loans are available for first time home buyers in your area. Keep in mind that grants are free, and loans need to be paid back. You may also want to check with a local lender.
There may be certain requirements that home buyers receiving grants must comply with in order to receive free grant funds. When you apply for a grant, you should read the eligible requirements very carefully to make sure you qualify for the grant. Some are income based. Be sure to pay attention to submission deadlines and any supporting documentation that the funder may require. Since there is no guarantee that you will receive a grant, it’s a good idea to apply to as many opportunities that you may qualify for to improve your changes of receiving any funds.