Grants for First Time Home Buyers
Want to buy a house? Don't have a big enough down payment? There are options for you, and these include grants for first time home buyers.
Grants? Yes, grants. Many eligible prospective home buyers have no idea where to turn to get real homebuyer grant money that helps meet down payment assistance requirements. In many instances, it could be the difference that helps you to close on that mortgage loan.
According to HUD, first time home buyers are individuals who have not had an ownership interest in a home within the last 3 years. Therefore, even if you've owned a home before, if you've been out of the market for 3 years, you could qualify for assistance. And here's more good news: even bad credit won't necessarily stop you from qualifying for a grant!
There are two main kinds of grants: you can get them from a charity, or from a government body. In most cases, you'll be looking to your state if you are interested in government grant. However, there are grants available from your city or municipal region. Doing a bit of research can really help in identifying the right group or groups to approach for grants.
Grant sizes will vary according to your income level (or the income of you and your spouse combined) and the number of dependents in your family. Even those making a moderate income (up to $43,000) with at least 4 dependents could qualify for a grant of $2500. But keep in mind that the income levels that qualify for grants will vary by region, because median income will vary by region.
Why apply for a grant? When you are buying a home, every additional dollar that you can put down up front will save you hundreds (if not thousands) later in interest. And why not? These grants are free money! Government programs typically are done as something called a "silent second mortgage". What this means is that there is no interest and no monthly payment. The second mortgage remains on the house until it is sold (and the funds repaid at that point) or forgiven by the government (which usually takes 5 to 15 years).
How do you qualify? The most important item is income. You must meet the income requirements for your area. At the same time, you must also be able to qualify and be approved for a mortgage. And finally, you can't have owned a home in 3 years. Your approval for a government assistance grant is almost assured if you meet these criteria.
Would like a grant but might need more assistance? You can also get grants through certain charities. While not as comprehensive as government programs, you may also qualify for help under a charity mandate. It's worth checking out.