First-Time Home Buyer Grants and Programs

First-Time Home Buyer Grants and Programs

Fortunately, if you are trying to achieve the dream of buying your first home, there are first-time home buyer grants and programs available to help. If you’ve never bought a home before, it can be daunting and seemingly impossible to afford a down payment for a home. Homes cost so much money and mortgages are difficult to qualify for. We can help show you what grants and programs may be available to you to help ease your frustration with purchasing your first home.

What is a Home Buyer Grant?

A home buyer grant (also called a first time homeowners grant) is money specifically for buying your first home. First-time homeowner grants work together with low-down-payment mortgages. These grants are designed to cover the down payment requirement. Down payments can be a lot of money and may prohibit you from making your dream of buying a home difficult. A home buyer grant can ease the challenge of purchasing a new home.

Blackboard sign with home buyer grants

Here are some things you should know about a home buyer grant:

First, many grants and first home buyer programs are government-sponsored. Many still are through private organizations, corporations, and non-profit foundations.

Second, first-time buyer grants and programs do not require you to repay the grant. It is not a loan and does not accumulate interest or debt.

Last, home buyer grants hold specific qualifications you must meet. To qualify, most likely you’ll need to meet specific income requirements and financial need. Income limits can vary depending on where you live and what the median household income is in your area.

Top 11 First Time Home Buyer Grants and Programs

Here are 11 grants and programs that can help you get a home mortgage without a huge down payment.

VA Loans

If you are an active or retired veteran, you may qualify for this program from the Veterans Administration. A VA loan will require no money down and waive the requirement of mortgage insurance. This makes this First-Time Home Buyer Grant, a very affordable option if you qualify.

FHA Home Loan Program

The FHA Home Loan Program is a very common program for first time home buyers. You get a loan from an FHA-approved lender, like a bank, and the FHA guarantees the loan. Dependant on your credit score, you will have a reduced requirement as to the down payment needed for a mortgage.  Additionally, your down payment can be a gift from a family member. Last, your closing costs with an FHA loan are rolled into your mortgage.

Rolls of money on an American Flag

USDA Loans

For low to moderate-income homebuyers in rural regions, USDA loans may be an option. A USDA mortgage is great for first-time homebuyers because you are not required to provide a down payment. And you’d be surprised at how much land in the United States qualifies as rural.

HUD First Time Home Buyer Programs 

HUD is a government program that helps people get housing and they offer several grants. Visit their site to explore various first time home buyer grants in your state

Dollar Home Program

HUD also offers a program, called the Dollar Home Program, which sells foreclosed FHA homes that have been on the HUD website for more than 6 months. Your local government is able to sell these homes if you are low income and meet their eligibility.

Good Neighbor Next Door Program

Also a HUD program, the Good Neighbor Next Door Program is a great option if you are a teacher, law enforcement officer, firefighter, or EMT. The U.S. Department of Housing and Urban Development (HUD) created the Good Neighbor Program (GNND) to make purchasing a home easier.

Person painting front the door

203k Loans

This loan is also an FHA loan but a specific program for first time home buyers who wish to purchase a fixer-upper. It allows you to borrow money to be used for your home purchase as well as renovations. Qualifications for 203k Loans are similar to an FHA Loan

Energy-efficient mortgage 

Backed by a VA or FHA loan, an energy-efficient mortgage would allow you to attain a mortgage and make energy-efficient upgrades on your home. Also, you will also not have to have a large down payment.

Conventional 97 Loan 

Fortunately, the conventional 97 loan requires only a down payment of just 3%. This is a conventional mortgage offered both by Fannie Mae and Freddie Mac. It allows borrowers to put a low down payment of just 3%. The downpayment, like with FHA loans, can also be a gift from a friend or family member.

Home Ready Home Path Mortgage

By Fannie Mae, this program aims to help ease financing challenges of multigenerational households, such as parents, adult children, and others sharing a home, as well as low- and moderate-income households. 

Home Possible Mortgages

By Freddie Mac, this program offers a low down payment mortgage to help low- to moderate-income borrowers.

A young couple moving into their new home

Finding the Right Home Buyer Grant

Now that we’ve shown you several home buyer grants, we hope you will continue to look for ways to make your dream of homeownership a reality. Make sure to research these and possibly other grants and programs. By adding a grant to your home mortgage, you may be able to reach your goal of purchasing your first home.