The federal government does not provide individual home buyers with grants directly, reports the U.S. Department of Housing and Urban Development. Instead, the government provides funds to states and municipalities for distribution. Individual grant programs vary, but they're typically restricted to first-time home buyers in need of down payment assistance.Continue Reading
Government-funded housing assistance requires the recipient be able to qualify for a mortgage, according to the U.S. Department of Housing and Urban Development. First-time home buyers also are required to attend a HUD-approved housing counseling class to help them better qualify for a mortgage and be better able to meet the obligations of a mortgage.
Some down payment assistance programs are linked with non-profit organizations that provide a gift of funds to the individual home buyer, explains American Dream Down Payment Assistance. Government-subsidized grant programs typically have more eligibility requirements and loan conditions than charity gifts. Many of these grants take the form of forgivable loans that do not need to be repaid provided the loan conditions are met. A common restriction on forgivable loans is a requirement that the home owner reside on the premises for a certain length of time, after which the loan does not need to be repaid.Learn more about Credit & Lending