Contrary to what many people think, grants for first time home buyers do not come directly from the federal government. The money is distributed to each of the states, which in turn decide how to fund the programs which are available. Each state may have different requirements. Let’s take a closer look at some details about the possibilities.
These grants only cover part of the cost in purchasing a first house, and are typically limited to no more than 10% of the purchase price. This money is for use in paying such things as 10% of the closing costs, and applicants are required to attend HUD schooling where they take such subjects as Home Economics, and Household Budgeting. This information is to prepare the occupants for the responsibilities of owning and maintaining their new house.
The American Dream Grant is designed to pay to up 6% of the purchase price as a down payment, and toward closing costs, as well as to help in funding some types of rehabilitation projects. There are other limitations in place as to how much the maximum granted amount can be to each approved applicants. Each state may have some additional requirements which must be met, and the total number of people in the family may have some bearing on the approval process.
The HOME Investment Partnership Program is more involved in helping to build developments which cater to low income families. Each family must qualify for specific percentages of HUD median family income requirements, and other types of percentages apply to the facility. The entire complex must be filled with a minimum required percentage of low income families, as well as each unit in the facility.
Some additional home grant programs include Community Development projects, and also include Emergency Shelter programs. Special housing assistance is available for people who have AIDS. Mortgage insurance is available for certain properties and can be included in the total amount of the mortgage for which the prospective buyer is applying. Each program has its own criteria, and certain requirements are in place that concern the application process.
Grants for first time home buyers are not intended to cover the entire cost of the dwelling and all closing costs that are accrued. These grants are only for assistance in helping with part of the cost, such as closing, and possible rehab efforts that are needed to make the dwelling safe for human occupancy. There is an abundance of additional information available for those who are interested in applying for any of these special programs.