loans that don’t have to be repaid, which is very helpful for someone who has all the elements of a successful home buyer but needs down payment assistance. Given the lower requirements for down payment, Federal Housing Administration (FHA) loans are a natural — if not a perfect — fit for the many down payment assistance programs available to help you on your way to buying a home. Most federal grants are targeted at first-time home buyers and are intended to help those individuals get started on home ownership. However, these grants shouldn’t be expected to cover a large percentage of the cost of the new home. Most cover less than 10% of the home’s value or can be expected to help pay for certain expenses, such as closing costs. For example, a down payment with an FHA loan is 3.5% of the cost of the home. Current FHA loan guidelines allow for the down payment portion of your home loan to come from several different places — a gift, personal savings, tax returns, and down payment assistance programs. Down payment assistance programs are funded at the city, county, and state levels; this funding makes the assistance programs ever-changing. Each program operates on its budget and has its own set of requirements. Credit score, income levels, and other factors determine your eligibility for down payment assistance programs. Since home buyer grants are meant to purchase a new home, there are qualifying rules for these funds. According to the U.S. Department of Housing and Urban Development, grants won’t be given to anyone who doesn’t qualify for a mortgage. Different states have different programs and conditions for home-buying grants. They have one thing in common: all 50
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