Grants For First Time Home Buyers

To buy a house people require to put down a down payment and a lot of people in the USA who belong to the low income group cannot come up with the money to put down as a down payment. For this the US government has set up a grant fund which is available in most states of the USA to which citizens of the US who are in the low income group can apply and get a grant to put down as the down payment towards a house and get a mortgage. People with a bad credit history can also apply for a grant and the qualification required is that the person has not purchased a house in the last three years.

The US government allocates US $ 200 million every year for this grant. With the government grants for first time home buyers now available people who could never afford to buy a house are now able to purchase a house. The US government works with banks and now because of this availability of these funds which a potential home owner can take and put down as a down payment the interest rates on mortgages has also dropped.

Most US states have their own laws regarding the provision of this fund and the amount of grant that a person can take is worked out based on their income and number of dependents. In some states a person who gets a grant and buys a home and lives in the home for 30 years does not have to return the grant. Anyone who takes the grant and puts it down as a down payment and after some years purchases another home will have to return the amount given in grant. There are no interest charges on the grant amount that is given.

A lot of people are not aware of the fact that there are grants for first time home buyer as this is not advertised by banks or by the state governments. A grant for first time home buyers has helped a lot of people in becoming home owners. First time home buyers grants also benefits people in a reduction in their taxes as the initial periods mortgage payments go more for payment of interest then towards the principal and interest payments are tax deductible. So people, who have taken the government grants for first time home buyers are saved from paying rent, become home owners and also get tax benefits. Low income group people can now use the grant to become home owners and buy their dream homes. This saves people from going to money lenders and having to pay high interest rates and as it is a government fund that people use they feel safer in dealing with government appointed agencies rather then with mortgage companies.

The grant fund has certain limitations also that one cannot use it to buy an expensive house and therefore is limited to the choice of houses that they can purchase. Secondly the mortgage that they can get may also be limited like a 30 year fixed rate mortgage. Thirdly one has to live in the house and cannot rent it. Fourthly if one sells the house before a certain time they will require to pay additional taxes. So everyone who wants to buy a house may not take a first time home buyer grant and may look for a low down payment mortgage which does not have any limitations on it.

Anyone in US who wants to avail the first time home buyers grants should go on the Internet and look at the HUD (Housing and Urban Development) web site and look at the grant for first time home buyers and carefully examine its clauses before applying for a grant.