The Truth About Government Grants for First-Time HomeBuyers

When it’s time to buy your first house, there are a lot of things to stress about. You may have heard that there are government grants you can get, that will help with your downpayment. Find out the truth here.

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Buyingyour first home can be an exciting and stressful time. First you have to figureout how much of a mortgage payment you can afford, to determine how much youshould spend on the house. You have to save up the money for a downpayment, andyou have to qualify for a loan, and you have to find a house that you likewithin your budget.

Andyou may have heard that there are government grants available to help with yourdownpayment. Some sites claim that you can get up to $15,000 toward yourdownpayment, and they make it sound easy. Just apply, and voila! You have beengiven a whole lot of money toward buying your first house!

Unfortunately,the truth is not so happy. The federal government does try to encouragehomeownership, and it does have several programs aimed at helping a newhomeowner get into his first house, but the government does not just have moneylying around that it gives out to anyone who asks for it.

Federal Government Programs

Ifyou search, which is the official federal government database of allgrants available to individuals and organizations, you will not find any underthe category of Housing that offer money to individuals. There just aren’t any,despite what other websites may claim.

TheUS Department of Housing and Urban Development (also known as HUD) gives grantsto organizations and groups, not to individuals, and the grants that it bestowsgenerally have a very specific purpose. Individuals wanting to buy a residencedo not qualify.

Sothe federal government does not provide money directly to individuals, but itdoes provide money to state and local governments, which in turn have their ownprograms for assisting in home ownership. These programs vary from state tostate, so you need to conduct research for the particular state where you liveor where you are trying to buy a home.

State Programs

Somestates provide downpayment assistance programs, from outright grants to low- orno-interest loans.

Somenon-profit organizations are chartered to promote home ownership, and they havevarious programs that can help.

Thereis a Mortgage Credit Certificate program, which you apply for through yourlender, which gives you a credit on your income taxes to help with yourdownpayment and expenses.

Andthere are a number of loan programs that may help first-time home borrowers,especially the ones administered by the FHA (Federal Housing Authority).

Ifyou qualify for an FHA loan, you will probably be offered a lower interest rateand will have to put up a far smaller downpayment than if you obtained amortgage through a private lender.

Where to Get More Information

Thereare many websites out there that provide helpful information about where andhow to obtain information about buying your first house. The first stop on yourlist should be your state’s housing authority website.

Youcan also discuss your search and discuss information at Free Grants Community, where other people whoare also looking to buy their first homes can share their tips and experience.



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