How To Get A Government Grant For Home Buyers

Buying a home is truly one of the largest parts of the American dream. The advantages of home ownership are too numerous to list. One of the best parts is that the money that would be spent on rent and gone can now be spent on something that is owned and will be around for years to come. Yet, for many, the dream of home ownership seems to be just out of reach. Most do not realize that the government has a grant program to help them out. This article will take a look at how to get a government grant for home buyers.

The first thing a person should know is that the government grants are only available for first time home buyers, or at least those who have not owned a home for at least three years. Second, there are two different types of grants available. One is a grant to assist with a down payment and the other is a tax credit of up to eight thousand dollars that is refunded at the end of the year.

The original grant program for first time buyers has been around for quite some time getting little publicity. In most cases, a state agency oversees the grant program and establishes the criteria for qualification. Information about obtaining this grant in each state is available on the internet.

In essence, this grant is a loan that is made by the government to help a person come up with the down payment and closing costs to get their first mortgage. It simply sits quietly in the background as a second mortgage until the person meets the criteria for loan forgiveness, at which point the money becomes a grant because it does not have to be paid back.

The amount of this grant depends on several factors. The value of the home, whether or not it meets government standards as established by the FHA (Farmers and Home Administration), the amount of the mortgage, and the family's income that is seeking the grant are all used in determining qualification and amount of the grant.

The second type of grant available is the tax credit for first time home buyers. Under this program, people who buy their first home can claim a tax credit on next year's tax return for up to eight thousand dollars based on the value of the home. This tax credit is refundable, even if the person owes no taxes at all, so it is effectively the same as the government handing over eight thousand dollars as a reward for buying a home.

The two programs operate independently of one another. This means that a person can qualify under both and receive both the grant and the tax credit for the same purchase. If all the qualifications are met, a person could save several thousand dollars off the cost of buying a home. With these two programs, the ability to buy a home comes a little closer to reality for many lower income families.

To learn if you qualify under the original first time home buyer's grant program, all you have to do is contact the state agency that oversees the program in your state. They will tell you what forms to file and what criteria must be met to receive down payment assistance. If there is no state agency responsible in your state, you can contact the department of Housing and Urban Development (HUD) for this information. Your tax professional can provide assistance with claiming the tax credit if you qualify.

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