Government Grants for Down Payment for First Time Home Buyers

Written by emma watkins
  • Share
  • Tweet
  • Share
  • Pin
  • Email
Government Grants for Down Payment for First Time Home Buyers
(Image by Flickr.com, courtesy of Cambodia4kids.org Beth Kanter)

If you are a first-time home buyer, you may qualify for a government grant and be able to take advantage of low interest rates and marked-down prices. Besides the Department of Housing and Urban Development (HUD) mortgage insurance programs, programs are sponsored by state or local government or other organisations.

Other People Are Reading

The American Dream Downpayment Act

Since 2003, under the American Dream Downpayment Act, the U.S. government has provided money to local housing authorities to award grants for first-time buyers to purchase a single-family home.

Who Qualifies?

You may be considered a first-time homebuyer even if you've owned a home in the past. According to the U.S. Department of Housing and Urban Development (HUD), you're a first-time homebuyer if any of the following applies:

• You've not owned a home three years before applying for a government grant. • You're a single parent who has only owned a home with an ex-spouse while married. • You're a displaced homemaker and have only owned a home with a spouse. • You've owned a home not attached to a permanent foundation. • You've owned a home that can't be brought into compliance with building codes for less than the cost of building a new house.

Income Eligibility

If you qualify for a government grant as a first-time homebuyer, you should find out from your local housing authority whether your household meets the income requirements for down payment assistance. Income eligibility varies from jurisdiction to jurisdiction. In addition, the larger your household, the higher the qualifying income will be.

How Does It Work?

Government grants require the first-time homebuyer to attend a home ownership class. You may also have to put 1 per cent down toward your home purchase. Besides, some grants work as zero-interest loans that expire after anywhere from five to 15 years.

For instance, if you buy a house with a government grant, you may have to repay the down payment assistance you received if you sell your house less than five years later. But, depending on the terms of the grant, after a certain number of years, that clause expires. You're then free to sell your home without worrying about repaying the government.

Also, keep in mind that certain government grants require an FHA loan. So, before you sign the contract on a conventional mortgage, ask your local housing authority whether you'd still qualify for government assistance.

Getting Started

Ask what down payment assistance the agency offers and what the income eligibility is. You can also visit HUD's website for a list of home-buying programs by state. Click on your state to find out what help is available where you live and what office to contact (See Resources).

Tax Credit

The Worker, Homeownership and Business Assistance Act of 2009 offers a tax credit of up to £5,200 for qualified first-time home buyers purchasing a principal residence. It also authorised a tax credit of up to £4,225 for qualified repeat home buyers.

Don't Miss

Filter:
  • All types
  • Articles
  • Slideshows
  • Videos
Sort:
  • Most relevant
  • Most popular
  • Most recent

No articles available

No slideshows available

No videos available

By using the eHow.co.uk site, you consent to the use of cookies. For more information, please see our Cookie policy.