There are numerous housing programs available from the federal government as well as state governments and community programs. If you are a first time home buyer, you can oftentimes use one of these programs to qualify for great terms on a loan or even get assistance with the cost of your down payment if you meet certain criteria.
Overall, these programs are designed to make the dream of homeownership easier to achieve.
When learning about government programs, it helps to understand that housing grants are not the same as loans. A grant is essentially free money, whereas loans must be repaid. There are actually very few legitimate grant opportunities you can qualify for as a homeowner, as most grants are reserved for special groups such as people who are struggling with the aftermath of a disaster, veterans with disabilities and other individuals.
With that in mind, learn about the best programs you can qualify for whether you are getting your first place or you need assistance covering other costs as a homeowner.
What types of first time home buyer federal programs are out there?
As a first time home buyer, you can qualify for a number of different government programs that make it easier to get a home. Many of these programs are offered through the Department of Housing and Urban Development (HUD), the Department of Veterans Affairs (VA) or other branches of the government.
It is important to understand that most house programs come in the form of a loan, which must be repaid over time. The majority of housing grants from the federal government are reserved for other government agencies, researchers, universities and companies that want to fund projects to benefit the community as a whole.
As mentioned above, grants for individuals are only provided to those who have a particular type of need.
With that in mind, you can still qualify for several great housing programs through HUD, the VA and other organizations. For example, one of the best resources available is the HUD Homestore, which is a website where you can browse through affordable houses for sale in your neighborhood.
HUD gov homes are foreclosed houses that were once financed with a loan from the Federal Housing Administration (FHA), which is part of HUD. When the owner defaults on his or her FHA loan and goes into foreclosure, HUD assumes ownership of the property and lists it for sale in order to recoup its losses.
Buying a HUD home can be a sound financial decision for just about anyone, as they can be found anywhere in the country and they do not require buyers to meet any special criteria. These houses are typically sold at a lower price than homes on the traditional real estate market.
HUD homes are especially affordable for people who qualify for the Good Neighbor Next Door (GNND) program. Through GNND, teachers, firefighters, emergency medical technicians and people in other similar professions can get a 50 percent discount when buying a HUD home in a revitalization area.
About First Time Home Buyer Grants
First time home buyer federal grants are not widely available to individuals. Remember, most government grants are awarded to organizations that want to help the community at large, not individuals who need assistance buying or owning a home.
One of the only types of first time home buyer grants you can get is from the VA. If you are a veteran with a total and permanent service-connected disability, you may qualify for a VA grant that allows you to adapt a home to suit your disability needs.
Other grants may be available from the Federal Emergency Management Agency (FEMA) for families who are dealing with housing issues after a natural disaster. Through FEMA’s Individuals and Households Program (IHP), families can receive limited funds to pay for certain types of damage that are not covered by their homeowner’s insurance.
Funds may also be granted to families that need temporary housing or need help replacing a home in the event of a total loss.
Even though the government provides limited resources for down payment assistance, you may still qualify for other programs that help you reach the same end goal. For example, the National Homebuyers Fund is a private organization that helps families realize their homeownership dreams.
Through this program, you may qualify for first time home buyer down payment assistance and other programs that make it easier to buy a house.
Find Out About First Time Home Buyers Loan Opportunities
The vast majority of homeownership resources from the federal government come in the form of a loan. Among these resources, the most widely used type of financing is an FHA loan. This type of first time home buyer loan is a great option because it allows you to do the following:
- Use as little as 3.5 percent as your down payment
- Get favorable loan terms and interest rates from a lender
- Qualify for a loan even if you have bad credit
When it comes to most bad credit home loans first time buyer opportunities are somewhat limited. However, FHA loans make it easier to get approved for a good loan even with a lower credit score.
This is because the FHA insures your mortgage, which protected lenders from a potential loss in the event you fail to make payments and go into foreclosure.
In the past, new homeowners could also qualify for a tax credit after buying a house. However, the first time home buyer credit is no longer available to new buyers today. In order to qualify for the first time home buyer tax credit, you need to have purchased your first residence between April 2008 and July 2010.
The good news is, you can still receive the first time home buyer tax credit 2016 if you never claimed it when you were first eligible.
In order to claim the first time home buyer tax credit 2017, you must fill out the appropriate Internal Revenue Service (IRS) form and submit it with your taxes. Keep in mind that you cannot claim this credit more than once even if you bought a home during the eligible period.
Who counts as a first time home buyer?
When determining your eligibility for the programs described above, it is important to understand who actually counts as a first time home buyer. Contrary to what you may think, you may qualify for a first time home buyer loan even if you have previously owned a home in the past. You are generally considered a first-time owner if you have not owned a home in the past three years. However, you can still qualify in other situations, such as becoming a single parent after separating from your spouse, even if you owned a home together.