Is it Possible to Buy a House Using Government Grants?
Many homebuyers are eligible to receive government grants to help with home purchasing. The grants you may qualify for vary, depending on factors such as your income, location and occupation. Government grants do not cover the entire cost of a home purchase, but may assist with closing cost, down payment or renovations.
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Federal Grants
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The federal government offers few grant programs to assist with home purchases. The Department of Housing and Urban Development (HUD) offers the Good Neighbor Next Door program, which gives 50 percent discounts off the home list price to teachers, firefighters and police officers in certain areas. HUD also offers has assistance programs for hurricane evacuees, public housing residents, and Native Americans. Most government grants for home buying come from state or local programs.
State and Local
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State and local home-buying grants vary based on the city and state in which you plan to buy a home. Grants for down payments, closing costs and renovations may be available to city or state employees, those buying in conservation areas, and low- to moderate-income home buyers.
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Eligibility
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Eligibility requirements vary based on the program. Most grant programs require that you meet certain income requirements and you typically must attend some form of home-buyer training or counseling to receive grant funding.
Restrictions
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Most government grants programs place restrictions on the amount you spend on your home, the location of your home purchase, and the number of years that you need to remain in the home before the grant funds are forgiven. Many programs also require that you use specific lenders in order to receive grant funds.
Tips
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Contact your state housing department before you begin your home-buying process, for information on home ownership counseling and where to apply for government grants. While the lender typically deals with most of the grant paperwork, it is important to take this step before you begin working with a lender because some lenders and loans may not work with the type of grant you want to use.
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References
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