The Ins and Outs of First Time Homebuyer Grants - Buying your first home can be stressful, costly, and confusing. The simple fact that you've never done it before can lead to anxiety about how you're going to afford the down payment, mortgage, and closing costs.
But what many first-time homebuyers don't realize is that there are government agencies that offer grants and tax breaks to help them out. By taking a few minutes to do some research, and educating yourself about these programs, you may be able overcome many of the challenges of buying a home for the first time.
Luckily for you, we've already done some of the legwork for, so below are some grants, programs, and tax breaks that we believe you should consider. Obviously, each program listed has its own guidelines that determine who is eligible and who isn't, so when you ask the appropriate parties about these programs, also be sure to ask about any specific age or income restrictions.
So, let’s get started!
One option for low-income households is a homeownership voucher from the U.S. Department of Housing and Urban Development (HUD). These monthly vouchers are designed to help first-time homeowners pay their mortgage and other home ownership-related issues and bills. You can apply for these vouchers at your local Public Housing Agency, but not all of them participate in the HUD program. Luckily, you can check the list of participating PHAs with just a few clicks of your mouse, by logging onto HUD's website (www.hud.gov). The website also gives detailed information about the requirements so you can determine if you qualify!
If you think you can afford the monthly mortgage payment on the home you intend to buy – but are worried about how you're going to pay the down payment and closing costs – perhaps you should consider contacting your state's Housing Finance Agency about their Down Payment Assistance Program.
These down payment assistance grants provide first-time homebuyers with a percentage of their down payment and closings costs based on the property's buying price. The percentage of help that they give varies from state-to-state, but every little bit helps.
One final avenue you might want to pursue is a mortgage credit certificate program. These are usually provided by either your local government or state housing finance agency. This program gives eligible first-time buyers a tax credit for their annual mortgage interest (sometimes as high as 15%!). By providing enrollees with a dollar-to-dollar reduction of their tax liability, it makes homeownership more affordable for individuals who otherwise may not be able to afford their own home.
The best part about a mortgage credit certificate program is that you receive the assistance, plus you're still eligible to claim the remaining percentage of your mortgage interest tax deduction like all other homeowners.
Your lender will know about all of these programs, and perhaps others, so when you meet with them about your loan application, ask for their guidance or recommendations regarding any assistance programs they think you might qualify for. They’ll also have the benefit of knowing about your exact financial situation, so they might be able to point you towards other programs that meet your needs even better.
Remember, you shouldn't feel ashamed about asking for assistance. After all, that's why these programs are there, to help those who need it!
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