Every state has homebuyers grants that can reduce your overall purchase price. Some first time homebuyer grants cover down payments, closing costs, and other purchasing expenses.

Local first time home owner grants can be much higher than the amounts from national programs. However, you may need to be a resident or buy a home in that state to qualify. 

Where to Find Free Money to Buy a House

You can apply for first home buyers grant if you are buying your very first home or have not owned a home in three or more years. Additionally, 1st time home buyer grants are usually for your primary residence. You may not qualify for free money if you are buying an investment property, even if it is your first property. 

First time homebuyer grants are commonly available through state governments, federally affiliated entities, private organizations, and more. Currently, the proposed Downpayment Toward Equity Act is a bill that could grant you $25,000 toward homeownership costs if you are buying your first home as a first generation homebuyer. Should it pass into law, you could use the first time homebuyer grant for the down payment, closing costs, interest rate reduction points, and more. 

Veterans Affairs Home Grants 

You can usually use a first time home buyer grant with VA loans and still take advantage of the benefits. Most grants do not require you to have a certain mortgage type and should not disqualify you for having a VA-backed loan.

The VA grants for home purchases and renovations are exclusively for veterans with qualifying service-related disabilities. Each of the following two VA grants let you buy, build, or change your home: 

·      A Specially Adapted Housing (SAH) grant offers up to $117,014 (for 2024) 

·      A Special Home Adaptation (SHA) grant offers up to $23,444 (for 2024) 

The grants are to be used for your permanent home or one you expect to live in for several years. However, you can apply for money to change a family member’s home if you live with them.

In 2024, the maximum award for a Temporary Residence Adaptation (TRA) grant is $47,130 if you qualify for SAH or $8,415 if you qualify for SHA. 

Fannie Mae’s HomePath Ready Buyer Program

The HomePath Ready Buyer program for first-time homebuyers offers favorable down payment terms and a grant for purchasing a foreclosed home. The first time homebuyer grant is up to 3 percent of the purchase price, and you can use it toward closing costs, like the down payment and service fees. 

To receive the 1st time homebuyers grant, you must:

  • Qualify as a first-time buyer.
  • Purchase a HomePath property for your primary residence. 
  • Receive a certificate of completion for the HomePath Ready Buyer training course.

National Homebuyers Fund

Not all home ownership grants are for just first-time buyers. The National Homebuyers Fund, Inc. (NHF) provides financial assistance through homeownership programs that help with down payments and closing costs, whether it is your first or fifth home. You can also apply for the grant when refinancing your primary residence. 

NHF’s financial assistance is up to five percent of the mortgage loan amount, and NHF down payment assistance (DPA) is available in most states and with participating lenders. You can apply for the grant with a: 

  • Conventional loan.
  • FHA-backed loan. 
  • USDA-backed loan 
  • VA-backed loan. 

The grant’s income limits and debt-to-income ratio requirements are flexible. The program also has more lenient FICO score minimums.  

Good Neighbor Next Door Program

The biggest grant may come from the Good Neighbor Next Door Program, which can cut a home’s purchase price in half. You must purchase one of the program’s listed homes in a revitalization area and have a qualifying job, such as a:

  • Emergency medical technician. 
  • Firefighter.
  • Law enforcement officer. 
  • Teacher of pre-Kindergarten to 12th grade.

In this program, you have two mortgages each for half the purchase amount. You would pay one mortgage, and the second or “silent” mortgage does not require repayment while you meet the program’s requirements. After meeting the three-year occupancy condition, the lender releases the second mortgage and you are no longer responsible for paying it. 

By Admin

Updated on 03/29/2023