HUD Financial Help
The U.S. Department of Housing and Urban Development, known as HUD, provides opportunities for families to purchase or rent safe and decent housing. In addition, HUD has provided funding to assist homeowners facing foreclosure with several options for staying in their homes. HUD provides grants to state, county and city departments as well as nonprofit agencies.
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First-Time Homebuyers
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The Federal Housing Administration is the department in HUD that insures loans for first-time homebuyers. This government insurance allows mortgage lenders to be more flexible with credit and down payment requirements. As of December 2010, a borrower must have a minimum credit score of 640 and make a 3.5 percent down payment toward the purchase of the home. The American Dream Down Payment Initiative provides a deferred $10,000 loan to eligible first-time homebuyers for down payment and closing costs.
Foreclosure Prevention Programs
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HUD has partnered with the U.S. Department of Treasury, local governments and nonprofit agencies to address the foreclosure crisis. The Making Home Affordable Programs, Hardest Hit Funding and the Emergency Homeowners Loan Program assist homeowners with alternative solutions to foreclosure. Homeowners can obtain a loan modification to make the mortgage more affordable. The unemployed can receive a forbearance on mortgage payments or payment assistance for a temporary period of time.
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Rental Assistance
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The Housing Choice Voucher Program, also known as Section 8, is a rental subsidy for low-income households. To qualify for the program, the total household income cannot exceed 50 percent of the area median income. The voucher holder is responsible for paying 30 percent of the total household income toward rent. The voucher covers the remaining portion of the rent, which is paid directly to the property owner. Local housing authorities administer the Housing Choice Voucher Program.
Real Estate Grants
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HUD provides grants to local governments and nonprofit agencies to develop affordable housing. Agencies and organizations must apply for these funds in a competitive application process. Eligible projects include housing for seniors, the disabled and low-income families.
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References
- Photo Credit house image by Earl Robbins from Fotolia.com
