Grant Money Possibilities

If you’ve landed on this page looking for grant money, I’ll be sharing some insights with you shortly.

However, as a homebuyer, there are excellent financing options available even if you have some funds for a down payment. For example:

  • FHA loans require just 3.5% down of the sales price.

  • First-time homebuyers may qualify for a 3% down payment option.

  • VA loans (for Veterans, Active Duty, or National Guard members) require no down payment.

  • USDA Rural Development loans also offer no down payment for homes in eligible rural areas.

Keep in mind that specific loan programs may have additional guidelines based on your eligibility and the type of home you’re purchasing.

The reason I mention these down payment options is simple—many grant programs often come with higher interest rates compared to current market rates.

With that in mind, there are a few key factors that can determine whether you qualify for a grant. These include:

  • Credit Score: Do you have a FICO score above 640?

  • Income Limits: Do you earn too much?

Many conventional loan grant programs are based on Area Median Income (AMI) for a specific county.

  • If your income is under 80% of the AMI, you may qualify for discounted mortgage interest rates and reduced PMI (private mortgage insurance).

  • If your income is under 50% of the AMI, you could be eligible for closing cost credits, depending on your transaction.

Additionally, some grants are based on household income and family size, offering up to $15,000 in assistance. However, these funds are limited, and once they run out, applicants must wait until they are replenished.

Down Payment Assistance Programs

Many states also offer bond programs that provide grant opportunities, but these often come with restrictions based on household income and FICO scores.

While not grant programs, there are additional financing options to consider. Be sure to consult your tax advisor, but as a homebuyer, you may be able to borrow against your employer-sponsored 401(k) retirement plan. Additionally, some retirement programs allow withdrawals with reduced tax penalties if you are a first-time homebuyer.

Gifts:

While this may not be a grant program, many of the loans mentioned above allow gift funds from various sources. However, it's important not to move money around before consulting with your lender. Proper documentation is required for underwriting, and there’s an easy way and a difficult way to establish a clear paper trail—let’s make sure you choose the easy one!

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