Know the Government's Home Ownership Assistance Programs for Low Income Families
written by: ciel s cantoria•edited by: Donna Cosmato•updated: 8/28/2011
Find information about grants to buy homes for low income families, and know your eligibility. The answers are right in your own community, since HUD extends financial help to families with low income, via state or local government sponsored home buying programs. Get tips on how to search for them.
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Useful Tips on How and Where to Find Info
Through the American Recovery Act signed by President Obama in Feb. 26, 2009, funds for different programs and projects were released under the administration of the U.S. Department of Housing and Urban Development (HUD.) About 75 percent of these funds are being channeled through state and local government units and agencies. The funds are utilized to provide jobs, improve homes, and help low-income families, who were hardest hit by the recent economic crisis.
A broad range of community development and housing projects across the United States are being extended to provide financial support. However, most of the housing funds are aimed at assisting families and individuals who have been rendered homeless or near homeless as a result of the economic despair.
Since we will be searching for grants to buy a home for low-income families, this article features some of the types of financial assistance programs being extended. Please keep in mind, though, not all states provide the same grants; hence, it is necessary to check HUD’s portal for State Info. (See the link in the Reference section below).
Once you reach the page for your state, take the following steps:
Choose the selection for “Learn aboutHome Ownership" in order to know what types of U.S. government home-buying grants, if any, are available in your state.
Once you reach the section “Buying a Home", click on selections like “Assistance Programs" . This is where you can find links to resources that provide information about the financial assistance programs.These programs can help eligible low-income families in buying, repairing, maintaining, or improving their homes.
Click on each type of “Homeownership Assistance" in order to get the links for the government unit or non-profit organization administering the homeownership assistance program in your locality. In some U.S. states, the information are featured under the “Homeownership Vouchers Program" .
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Types of Grants Available
The American Dream Down-Payment Initiative (ADDI) Assistance
This program was ratified in 2003, to assist low-income and eligible first-time home buyers to provide for the down-payment, closing costs, and rehabilitation of the home purchased. Based on HUD info, every state was granted ADDI allocation.
To qualify as low-income, the applicant’s earnings must not exceed 80 percent of the current median income in his or her community. The total ADDI assistance to be granted to a single individual must not be more than $10,000 of the purchase price, or 6 percent of the home’s buying price. The rehabilitation projects related to the purchased property should be completed within one year. To find more info about the city or county providing this type of grant, proceed to the Field Office Community Development Planning Director’s page. From there, follow the instructions on how to locate the city or county government office to inquire into.
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Single Family Housing Loans and Grants
These are provisions for financial assistance administered by the U.S. Dept. of Agriculture Rural Development and open to American rural residents through the following loan guarantees, loans, and grant programs:
Rural Housing Guaranteed Loans
Rural Housing Direct Loans
Rural Repair and Rehabilitation Loan and Grant
Mutual Self-Help Loans..
For more information about these federal grants the local government office to visit is the state or community USDA Rural Development unit.
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Native American Home Loan Guarantee Programs
This financial assistance is open to Native Americans by way of loan guarantees to private mortgage lenders. These are for loans in favor of one-to-four-member family homes on tribal trust lands, or on allotted individual lands, in an Indian or Native Alaska area. This gives the former the opportunity to avail housing loans via private lending facilities with a low down payment of:
2.25% for loans over $50,000
1.25% for loans below $ 50,000
There is no monthly mortgage insurance required, since the loan is guaranteed by the USDA. Information about this type of home ownership assistance is available at the local or state US Rural Development office.
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Homeownership Vouchers Programs
These are grants available to low-income families and first-time home buyers who wish to purchase a public home, but need help to meet the monthly mortgage and all other home ownership expenses.
This loan is granted by the HUD through the local Public Housing Agency (PHA). It is important that the PHA's home ownership programs have prior HUD approval as proof of the program's workability and legality. For those interest, more information is available at the HUD website for Section 32 "Home Ownership for Public Housing Residents."
Other Financial Assistance Available
You can find other federal financial assistance that will furnish low-income homeowners with:
the funds they need for home repair and improvement
accessible and affordable housing for US citizens suffering from disabilities who wish to live independently and respectably in their communities.
HUD subsidized apartments, utility bills payment assistance, and other senior housing programs that give options to the elderly citizens in search of housing facilities. Choices may be for Independent Living, Assisted Living or Nursing Home Care. For more details, interested seniors may visit the HELPGUIDE.org website.
The first step is to seek consultation and assistance with HUD's authorized Housing Counseling Agencies in one's locality regarding these federal grants.The housing counselors are in the know of other available U.S. government grants to buy a home other than those mentioned above.