Preparing for your first home purchase can be an exciting but challenging experience. Saving for the down payment is one specific barrier you could be trying to overcome.
Fortunately, there are grants and special programs available that can make homeownership accessible to first-time homebuyers and those with low- to moderate-income. Here are four grants and homebuyer programs to consider:
The National Homebuyers Fund is a non-profit that seeks to expand homeownership nationwide. There are two programs available through the National Homebuyers Fund. The first is the nationwide down payment assistance program available in various states, and the Mortgage Credit Certificate Program for California residents only.
The grant offers up to 5 percent in down payment or closing cost assistance. Guidelines may vary by state. The grant doesn’t have to be repaid, and it’s not only limited to first-time homebuyers.
Each city or state may have a grant program that you can look into as well. If you need assistance with a purchase, it’s worth looking into what your city, county, and state can offer.
The Virginia Housing Development Authority DPA Grant Program is an example of a state initiative. The grant is for qualified first-time homebuyers who meet conditions. There are household income limits and minimum credit score requirements.
You can get up to 2 to 2.5 percent of the purchase price in a grant for your down payment. Learn more about the VHDA program for first-time homebuyers here.
The Good Neighbor Next Door program isn’t just for first-time homebuyers, but it is a program that may be beneficial for first-time homebuyers who qualify.
Good Neighbor Next Door offers HUD-owned single-family homes to homebuyers who work in public service. Law enforcement, firefighters, EMTs, and teachers may be able to purchase a home in an eligible location at a 50% discount. For example, if a HUD home is listed for $200,000, an eligible borrower can purchase the home for $100,000.
There are some stipulations. You need to live in the home for at least three years, and you can’t own any other property when you make the purchase. Homes that qualify for this program are located in certain areas. Learn more about the eligible locations here.
Homebuyers with low- to moderate-income may be able to qualify for the HUD Dollar Home program. Dollar homes are homes that went into foreclosure and are now owned by the Federal Housing Administration (FHA). Vacant homes owned by the FHA may go on sale for $1 if they’re not sold after six months.
The homes typically need repairs, sometimes extensive repairs. However, if you’re interested in a fixer-upper for your next home, taking advantage of the HUD Dollar Home program could be a good choice.
Purchasing a home for the first time can feel like a far-off dream when you’re trying to get a down payment together. These programs have helped other homebuyers get the keys to their home, and they could be a solution for you as well.
*Atlantic Coast Mortgage is not affiliated with or acting on behalf of or at the direction of the FHA, VA, USDA or the Federal Government.