First-Time Homebuyer Programs That Help You Get Into Your New Home

In the U.S., there are several programs that assist homebuyers with purchasing their first homes. Most of them are provided for and by government agencies. However, there are also private funding options and grants that can help you buy your first home.

Seller's Assist, the Little-Known Private Grant

Very few people are aware that this program even exists because it is not used that often. In fact, if you do not ask about it or for it, your realtor and the seller of the home you are interested in will not offer it. To get it, you have to ask both the realtor and the seller of the home if they would be willing to grant you up to 3% of the home's selling value as part of your down payment. It helps the seller unload the property and helps you, the buyer, reduce the purchase price.

Grants.gov

From time to time, the government posts opportunities for first-time home buyers to apply for grants to help them purchase a home. Specialty grants, such as a state veteran's grant, helps special interest groups with their home purchases. The grants range from very small, around a few hundred dollars, to quite sizeable, around a few thousand dollars. At any rate, it is worth perusing to see what you can apply for to help you pad your home buying finances.

Fannie Mae and FHA

Fannie Mae and the FHA, or Federal Housing Administration, both provide loans and financing to first-time home buyers. The biggest difference between the two is that Fannie Mae will require a downpayment prior to approving a loan, and the FHA will provide loans to low- and very low-income buyers who might not otherwise be able to purchase a home. The reason behind Fannie Mae's downpayment requirement is that the organization hopes to teach fiscal responsibility to its applicants and help them understand that a home is a major investment and not something they can abandon when trouble arises. Additionally, both organizations have limits on how much you can borrow and include very low interest rates.

Additional Grants and Funding

HUD, or the Housing and Urban Development Department, is another government website that provides grants for and to home buyers looking for new homes for sale. Freddie Mac is not for home buyers, but rather for real estate agencies. However, any homes that a real estate agency purchases with Freddie Mac funding and then sells to you comes at a reduced cost because the agency has to pass the financial savings on to the buyer. Ask your realtor about any other funding sources, both local and federal, which can help you get into your first home sooner.