Government Grants for Assistance With Home Down Payments

Americans have state administered grants available for assistance with home down payments.

Free money? Sometimes. For certain Americans, there are government grants available to assist with the purchase of a home. Low-income families are often eligible for grants to pay for or to put toward a down payment on a house. Most programs are funded by the federal government, but administered at the state level. Local agencies have the most accurate list of available funding, as well as state eligibility requirements.

Neighborhood Stabilization Program Grants (NSP)

According to the HUD.org information page, the NSP grants were developed to stabilize areas hard hit by economic hardship and foreclosures. One way the program achieves this goal is by assisting with home down payments. Unlike most other grants for down payment assistance, the NSP grants are not reserved solely for low-income buyers. In fact, grantors for the funds allocated for housing are required to engage in activities that directly assist low-income and moderate-income residents of their areas. The income cap is put at no more than 120% of the local median. Due to the eligibility and other specifics differing from state to state, interested applicants should contact their local agencies. See the resources section for a link to a search portal for NSP grantors.

HOME Down Payment Grants

Homebuyers looking for assistance with down payments may be eligible for grants from the HOME program. $2 billion was allocated and distributed throughout the United States. This funding is now controlled by local and state agencies by way of grants to low-income citizens to use toward down payments on homes, as well as their closing costs. HOME is overseen by the Department of Housing and Urban Development, which also has listings of below-market value homes that may be purchased. See resources for a link. The HOME grants can be used to assist with down payments for any home in suitable condition, as per inspection guidelines for your state and local agencies.

American Dream Downpayment Initiative (ADDI)

The American Dream Downpayment Initiative began in 2003. Under the ADDI program, eligible applicants can qualify for grant assistance for their down payments of up to 5% of their mortgage loan. Some associate purchase costs may also be granted. ADDI grants are income-based with eligible recipients meeting state income levels. Generally, the income cap is 80% of the area's median. The HUD has state-by-state information. Alternatively, contact your Public Housing Agency (PHA). For common questions and contact details of your local PHA, call the PIH Information and Resource Center at 1-800-955-2232.

References

• HUD: Neighborhood Stabilization Program Grants
• HUD: Press Release January, 2010: NSP Funds
• Department of Housing and Urban Development: Affordable Housing
• HUD: ADDI Program
• HUD: Public Offices Contact Portal

Resources

• Search for NSP Grantees