Government Grants for First Time Home Buyers

Thinking of buying a home? The process can be overwhelming, especially for first-time buyers. Unless you have all the money to buy a home, you may need some kind of financing. Fortunately, there are quite a number of useful government grants or programs that first-time home buyers can highly benefit from in terms of cost savings. Here is a list of some of these programs. 

The Federal Housing Administration (FHA) Loan

The Department of Housing and Urban Development (HUD), under which the FDA operates, awards a considerable amount of dollars annually to make home ownership to as many people as possible. The FHA loan is a program for most people, especially first-time home buyers as well as those with a relatively shaky credit history. The FHA’s backing allows the borrowers to qualify for loans with little or competitive interest rates, lower closing costs, and smaller down payments compared to the other conventional loans. The backing also provides some level of protection to the lenders, which protects their stake in the loan in the event that you default. 

If your credit score is above the FHA’s threshold, you could be eligible for mortgages with down payments of a very low percentage of the purchase price. While you might still qualify for the loan with a credit score that is lower than the threshold, the down payments you would be required to pay will be of a much higher percentage. 

Energy-Efficient Mortgage

This is for those who intend to make some improvements to their homes, particularly to make them more environmentally friendly. These loans are usually insured through the VA and FHA programs. You don’t necessarily have to make larger down payments. Besides, extra costs are usually rolled into the primary loan. 

The Department Of Agriculture Loan

The Department of Agriculture also has an assistance program for homebuyers. You don’t need to be a farmer or necessarily live on a farm to qualify for the home loans offered by this department. However, the program focuses on homes in certain rural areas. This is because the Department offers these loans through a Rural Development Program. Usually, home loans from this department are guaranteed. The loan payments could be fixed and down payments may not even be required. Streamlined processing of the loans is provided for those with credit scores above the required threshold. If you have a lower credit score, you may be needed to provide extra documentation concerning your payment history. There may also be income limitations but these would vary by regions. 


Fannie Mae And Freddie Mac

These are entities sponsored by the government who work with different local lenders to provide mortgages. These mortgages target the moderate- and low-income families. Lenders have the ability to offer competitive interest rates under the backing of these entities. They can also accept relatively low down payments. 

Good Neighbor Next Door

This is another program sponsored by the HUD. It includes law enforcement officers, emergency medical technicians, and firefighters. It offers a half discount on the listed prices of homes. However, these homes have to be in revitalization areas. Another condition is that you have to commit yourself to live in the property for a given period of time, which is stipulated on the website of this program. The sales website of this program also lists the homes for a given number of days. You can also use the website to look for the properties that are available in your state. 

The Veteran Affairs (VA) Loan

This program is available under the Department of Veterans Affairs. It’s meant for veterans, their surviving spouses, and active-duty military members. These loans are oftentimes generous in the sense that no mortgage insurance or down payments are required. The interest rates are also competitive. The program guarantees a part of the loan, allowing the lenders to provide favorable or special features. Since there are often few requirements for aspects such as sufficient income or debt, lenders may add their own extra requirements. 

Native American Direct Loan

The VA acts as the lender in this program. This loan is meant for veterans of the Native American origin together with their spouses. The homes bought under this program have to be on federal trust lands. Eligible persons are usually not needed to pay for the private mortgage insurance or even make down payments. The closing costs are also quite low.