Federal Grants for Home Buyers
Part of the 2009 economic recovery package signed into law by President Barack Obama calls for special grants for first-time home buyers. In addition, buyers who are buying their second, third or fourth home also qualify for certain grant programs that can help achieve the dream of homeownership.
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First-time Homebuyer Tax Credit
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The American Recovery and Reinvestment Act of 2009 stipulated that first-time homebuyers will receive a tax credit of up to $8,000 if they are able to close on a house before Dec. 1. If a house costs less than $80,000, then the person will receive 10 percent of the cost of the house as the tax credit. The Internal Revenue Service defines a first-time homebuyer as someone who has not owned a home in the past three years. Only individuals who make less than $75,000 a year and married couples who make less than $150,000 qualify.
FHA Down Payment Grant
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The Federal Housing Administration has approved several organizations to give down payment assistance to homebuyers. This money is used for down payments and closing costs. Some of the more prominent programs are: Ameridream, which will donate up to 10 percent of the closing costs; Nehemiah, which will give up to 6 percent of closing costs; Grant America, which can give individuals up to $34,000 in assistance; and Quickdown.
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203(b) Mortgage Insurance
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The federal Housing and Urban Development program will insure mortgages for some individuals who qualify. As long as you meet the FHA credit qualifications, you are eligible for 97 percent financing, and upfront mortgage premiums can be incorporated into the mortgage itself. However, the borrowers must pay the annual insurance premium.
HUD programs
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The Housing and Urban Development office also offers additional grants for certain groups of people that qualify. Senior citizens, disabled people, Native Americans and veterans of the U.S. armed services must meet certain income eligibility requirements to receive down payment or mortgage assistance.
USDA Rural Assistance
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The United States Department of Agriculture has a number of programs that are geared toward people who live in rural parts of the United States. The agency offers down payment assistance and mortgage payment options to people who are struggling to pay their bills. In addition, the USDA offers grants and low-interest loans for home repairs.
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