Many first-time homebuyers and homeowners who want assistance with their expenses are interested in receiving grants from the government.
Even though the majority of free government money is reserved for organizations and local governments, there are still several funding opportunities that you may qualify for as a homeowner or a prospective buyer.
About First Time Home Buyer Federal Grants
Buying your first home or moving someplace new is an expensive endeavor. You may face even more challenges financing a purchase if you have a disability, are low-income or are dealing with the after-effects of a natural disaster. Luckily, there are several house programs available through the federal government that you may qualify for.
Remember that most housing grants are reserved for organizations that plan on using the funds in order to improve the community or make services more accessible to its residents.
Rather than finding first time home buyer grants, you are far more likely to qualify for home loan opportunities from the government instead.
Loans, unlike grants, must be repaid. However, you can typically get great terms by utilizing loans such as those from the Department of Veterans Affairs (VA) or the Federal Housing Administration (FHA). The FHA is part of HUD, the Department of Housing and Urban Development.
For example, you can get down payment assistance by signing up for a loan backed by the FHA or the VA. Receiving first time home buyer down payment assistance allows you to put a minimum of 3.5 percent down with an FHA loan, in some circumstances.
When it comes to VA-backed loans, you can oftentimes qualify for first time home buyer loans with zero down.
If you meet certain eligibility criteria, you could qualify for grants that helps you buy a new home or renovate an existing one. Through the VA, you can apply for the following types of grants if you have a permanent disability that affects your mobility:
- The SHA Special Housing Adaptation grant, which allows you to adapt a home that you own or plan on buying so that it suits your disability needs.
- The SAH Specially Adapted Housing grant, which helps you build or remodel a home that is adapted for your disability, or get help covering the unpaid balance on a home you bought without a Department of Veterans Affairs grant and adapted.
- The TRA Temporary Residence Adaptation grant, which helps you make changes to a home where you are living temporarily so that it accommodates your needs.
Note that these types of funding are oftentimes used as first time home buyer federal grants, but they are not required to be used exclusively by veterans buying their first home. In most cases, an SHA, TRA or SAH grant can be used for any new or existing home.
Federal grants such as these have limited availability and are only provided to veterans or other individuals who meet specific criteria. However, there are other non-government programs that may provide exactly the type of financial assistance that you are looking for.
The national homebuyers fund, for example, is a program that helps low- and middle-income families afford a down payment on their homes. As a prospective homeowner, you may also find assistance from state or local groups that provide funding opportunities for first-time buyers.
- SNAP Prescreening Eligibility
- State WIC Contacts
- National School Lunch Program
- Child Nutrition Programs
- Health Insurance Marketplace
- National Association of Free & Charitable Clinics (NAFC)
- Temporary Assistance for Needy Families (TANF)
- Affordable Childcare & After school programs
- Low Income Home Energy Assistance Program
- Low Income Housing
- Find Local Food Pantry
Learn About the Home Repair Assistance Grant
In addition to the funding opportunities described above, individuals may qualify for house programs that offer financial support following a natural disaster.
The Federal Emergency Management Agency (FEMA), for example, offers the Individuals and Households Program (IHP) for families who are unable to afford their housing needs through any other means. The IHP provides help in the form of:
- Immediate housing assistance, which can cover the cost of temporary lodging, rental housing, home repairs or a replacement home.
- Assistance replacing personal property other than a home.
IHP assistance can come in the form of limited housing grants, as well as loans from the Small Business Administration (SBA). However, you do not need to own a business to qualify for assistance from the SBA.
Your home needs to be located within a designated disaster area and you must have no other means of recouping your losses in order to benefit from an IHP grant or loan. In other words, you cannot receive money from an insurance claim while also getting IHP assistance to cover the same loss.
For example, you may qualify for this program if your home has sustained damage from a flood but your homeowners insurance policy does not cover the damage.
As with any program, there are limitations to what you can receive under a home repair assistance grant such as this one. The goal of the IHP program is to secure a safe, sanitary and functioning living environment after a disaster.
With that in mind, you cannot rely solely on FEMA to restore your home to its pre-disaster condition. Even if you qualify for this grant, you may need to apply for additional funding, such as an SBA loan, to return your home to its original condition.
Another similar home repair assistance grant is offered through the Low Income Home Energy Assistance Program (LIHEAP). This program helps low-income households cover costs relating to:
- Heating and cooling bills.
- An energy crisis.
- Minor home repairs that will help with weatherization.
Weatherization assistance programs such as LIHEAP are beneficial because they can help you update certain features in your home that will make your house more energy-efficient.
While making such updates will help lower your heating and cooling costs, LIHEAP can also help you pay for utilities so that you can maintain a comfortable environment in both summer or winter conditions.
If you are interested in applying for this home repair assistance grant, it is necessary to work with the local LIHEAP office in your state. This program is run at the state level, which means that its requirements may vary depending on where you live.