I've heard about first-time home buyers
getting help from the government to purchase a home. Exactly
what do I do to receive the same special treatment? I've looked
on the Internet but only got Web sites that, of course, want
you to buy their programs before giving you any information.
Please let me know how to do this step by step. I would really
appreciate it. Thank you very much.
Glad to oblige. While the notion of "free money" is
usually a whimsical one, the federal government just might have
some of it set aside for you in the form of a grant of up to
$10,000 to put toward a down payment and/or closing costs on
a new home -- with a few caveats, of course.
Under a first-time home buyers' program called
American Dream Downpayment Initiative (ADDI), created a couple
of years ago but funded only this year, the government can
grant consumers up to 6 percent of the purchase price of a
home (maximum: $10,000). To qualify, you must be a first-time
home buyer with income that doesn't exceed 80 percent of the
area's median income.
About 400 state and local government agencies
are sharing a relatively scant $162 million in funding for
the program. For information on whom to contact in your state
to see if you qualify, go to the U.S. Department of Housing
and Urban Development's Web
site or call HUD's locator service at 202-708-1112.
Appropriations for ADDI are expected to run
out quickly, so you'd better hustle. A lot of folks would
like to take advantage of this program, and with political
and budgetary uncertainties still ahead, there's no telling
what housing programs will be cut, created or short-funded
If you don't fall under 80 percent of your area's
median income, there are other programs at both the federal
and private levels that can get you into a house with no money
On the private side, many lenders are offering
100 percent financing options, and some will finance closing
costs, meaning you may be able to buy a home with less than
$1,000 out of pocket. Check with your financial institution
and a few of its competitors to shop for the best deal. Many
of these banks tap into state or federal programs for funding.
The Federal Housing Administration also has
many low- or no-down-payment programs available, such as its
First-Time Home Buyer program. But if you have a good-to-excellent
credit score, you might fare better in a conventional loan
program and save thousands of dollars over the duration of
a 30-year loan. Under FHA, you may have to jump through more
hoops, such as prepayment of mortgage insurance, payment of
3 percent down and special FHA appraisal fees. (Either way,
the terms of your note will be determined by a loan officer.)
For available local home-buying programs, visit
the HUD's local buying Web
site. HUD also provides a list of local
housing counseling agencies.
You might also find the extensive list of resources
at an objective nongovernment site, www.firsthomebuyers.net,
to be helpful.
Good luck, future homeowner!