First Time Home Buyer Program
If you are a First Time Home Buyer then you may very likely qualify for some of the govenment grant programs that are available to help first time home buyers with down payment assistance and possibly closing cost expenses.
There are a number of first time home buyer programs such as American Dream Downpayment Initiative, the Good Neighbor Next Door Program and the Home program. These programs provide down payment assistance to people who fall in a lower income bracket.
Home Down Payment Assistance
There are many state and local home down payment assistance programs. Some offer down payment assistance that does not have to be paid back if you live in your house for a certain amount of years.
Others offer assistance in the way of a second mortgage at a very reasonable interest rate. This of course has to be paid back over time (usually 15 years) but is an acceptable method to home mortgage lenders for getting your down payment money.
The majority of mortgage lenders do not allow you to go out and borrow your down payment money from a bank or some other lending institution.
Often times the government down payment assistance money can also be used to help cover the expense of your mortgage closing costs.
Often times the state and local home down payment assistance programs are funded by bond money. When you inquire about this type of program you may be told that there are no funds avialable at this time. That doesn’t mean that funds won’t be available in a few weeks or months when another bond is issued. Be sure to ask if they know when the next round of funds might be available and then call back at time.
First Time Home Buyer Tax Credit
Even though this is not necessarily a grant the First Time Home Buyer Tax Credit is currently one of the most popular advantages from the government for the first time home buyer that is available in 2008 and 2009.
It has the following features and guidelines:
- Must not have owned property within the last 3 years
- Must purchase and close on a home before 12/01/2009
- Tax Credit is 10% of purchase price up to $8,000
- Does not have to be repaid if you live in the house for 36 months
- Can be claimed on your 2008 or 2009 taxes
This tax credit was made available as a part of the latest economic stimulus package and is a wonderful opportunity for first time home buyers.
It can not be used as your down payment money and you still have to be able to qualify for your mortgage loan for the new home.
Grants for First Time Home Buyers
A few years ago there were hundreds of down payment assistance programs termed as grants and were easily accepted by mortgage lenders for a buyer’s downpayment money.
However, today that list has been trimed down considerably. So, be sure that the grant program that you are considering using will be accepted by your mortgage lender before you spend too much time applying for a grant.
If the grant program asked you for an application fee, beware and definitely check with your lender before pursuing.
Normally, when a buyer applies for a loan with a mortgage loan office that person will be aware of grant programs available in your area and can advise you on what program would be good for you to pursue.