There are numerous programs designed to help first-time homebuyers purchase a primary residence. These programs are offered by both government entities and private firms and may provide down payment assistance or low interest rate loans. Actual grants are not typically awarded, but instead assistance is delivered in the form of a loan, which may be forgivable after a specific period of time.
Government Loans and Grants
State housing authorities may offer loans and grants to first-time homebuyers. The U.S. Department of Housing and Urban Development provides a resource for finding each state's local housing authority, and, many times, state loan programs are offered in conjunction with Federal Housing Authority-insured loans. Examples of some of these available programs include, but are not limited to, the following.
American Dream Down Payment Initiative
First offered in 2003, this HUD program provides first-time homebuyers with funds to assist with a down payment and closing costs. Amounts awarded cannot exceed 6% of the home's purchase price, to a maximum of $10,000. To apply, individuals must contact their local HOME program office.
Offered through the California Housing Finance Agency, the CalPlus program provides first-time homebuyers with an FHA-insured, 30-year fixed rate loan. This loan is offered in addition to a deferred-payment loan at a 3.5% interest rate to assist with a down payment.
Offered by the Indiana Housing and Community Development Authority, the First Place program provides first-time homebuyers with 30-year fixed rate loans at low interest rates. The program is intended to be used with loans backed by the FHA or another qualifying agency.
The First Home program is administered by the Iowa Finance Authority. It provides first-time homebuyers with up to $2,500 for down payment or closing cost assistance.
Varying State Programs
Each state's programs differ, as do the eligibility requirements. Check with your state's housing authority to see which programs are available to first-time homebuyers and identify those for which you are qualified.
Availability of grants and loans from private organizations vary widely in their availability and eligibility criteria. Check with you local housing authority to find out about these grants.
An example of this type of grant from a private organization is the Home Purchase Assistance Program, which is administered by the Greater Washington Urban League. This program provides moderate- to low-income families with as much as $44,000 in funds to purchase a home or condo. The property must be located in the District of Columbia.
Finding Your Loan or Grant
If you are a first-time homebuyer, there are grants and loans out there to assist you in making that big purchase. Investigate federal, state, and privately offered programs to determine if you can obtain assistance buying your first home.