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What is a first-time homebuyer grant?
First-time homebuyer grants are a fantastic way to get a leg up on the home-buying process. They can help you cover a portion of your down payment, closing costs, or even lower your interest rate. These grants come from a variety of sources, including banks, federal and state agencies, and even non-profit organizations.
How to qualify for a first-time homebuyer grant?
While many grant programs have different eligibility requirements, there are some common threads that run through most of them:
- Income limits: Most grant programs are designed for folks who make a certain amount of money, often 80% or less of the area's median income. That means your income needs to be on the lower side to qualify.
- Home price limits: There's usually a cap on the price of the home you can buy with grant money. This varies based on where you're buying.
- Your contribution: You'll still need to put some skin in the game. Many grants require you to contribute a small amount, like 1% of the purchase price or $1,000, whichever is higher.
- Primary residence: The grant money is usually for your primary home, not a rental property or a vacation home.
- Homebuyer education: Many programs require you to take a homebuyer education course before you can get the grant money.
Several First-time Homebuyer Grants:
- National Homebuyers Fund
This nonprofit offers grants of up to 5% of your home's purchase price，and you don’t actually have to be a first-time homebuyer to qualify. But you'll need to find a mortgage lender that participates in the program. You can call the organization for help finding local lenders. - Bank of America grant programs
They have two grant programs, the America’s Home Grant and Down Payment Grant programs, offering up to $7,500 and $10,000 respectively. You'll have to get your mortgage from Bank of America. - Chase Homebuyer Grant
This grant provides up to $7,500 to help you buy down your interest rate or cover down payment costs. However, you can also use the money for fees associated with the mortgage or down payment costs. - Wells Fargo grant programs
They offer two grants, the Homebuyer Access grant and the Dream. Plan. Home. credit for closing costs. The former provides up to $10,000 for down payment assistance, and the latter offers up to $5,000 lower-income borrowers in specific areas. You'll need to get your mortgage from Wells Fargo. - HomeReady and Home Possible
These conventional loan programs offer a $2,500 credit to those with "very low income" (50% or less than the median income for your area). The credit can be used for your down payment or closing costs. Application deadline is February 2025. - State and Local Grants
Don't just rely on those big national programs. Your local mortgage lender might be sitting on a gold mine of free money! For example, First Federal Bank of Kansas City is handing out grants of up to $5,000! And if you're in New York, ESL Federal Credit Union has a matching program for Black and Latino buyers that can provide up to $10,500! And if you're in California, Tri Counties Bank has a matching grant that can go up to $30,800! Many states and cities have their own programs, so check with your state's housing finance authority or a real estate agent. - Good Neighbor Next Door Program
This program offers a 50% discount on homes in revitalization areas to law enforcement officers, teachers, firefighters, and EMTs. You'll need to live in the home for three years to keep the discount, and no need to pay that discount back. - HomePath Ready Buyer Program
This Fannie Mae program offers up to 3% of your home's purchase price for closing costs. You'll need to buy a HomePath property, which is typically a foreclosed home that might need some work.
How to apply for a first-time homebuyer grant
Most home-buying grants require a minimum credit score. To apply, you typically must provide extensive income and assets documentation, including at least two months of recent pay stubs and employment verification.
Depending on which grant you’re after, you might be able to apply for the grant at the same time as you apply for your mortgage. Otherwise, you’ll need to follow the organization’s guidelines. Many allow you to begin the application process online.
Sources
To ensure the information is up-to-date and accurate, it comes from:
https://www.bankrate.com/mortgages/first-time-homebuyer-grants/
https://edition.cnn.com/cnn-underscored/money/first-time-home-buyer-grants
https://www.cnbc.com/select/first-time-homebuyer-programs-grants-california-texas-new-york/
And if you want to dig even deeper, you can always check out the website I got all this info from! They've got tons of details and even more first-time homebuyer grant programs listed.