Buying and moving into a new home is one of life’s great experiences, especially if you’re buying your first home. From getting that pre-approval to the “yes!” response on an offer to closing and moving in, every step is exciting. And while the process is engaging and fun, it’s important to prepare for moving day […]
How to Get a Grant for Your Down Payment
You have decided to get down payment assistance in the form of a grant. But how do you get a grant and what are the qualifications? It’s easier than you’d think, but has some stipulations.
Talk to Your Lender
It seems like a straightforward piece of advice, but many people don’t talk to their lender about grant programs because they are unaware they exist or don’t think they qualify. Your lender can guide you through the process and help you find a program that is right for you.
Grants Have to Be Used for the Stated Purpose
Once you find a grant program, you must meet the grant program guidelines:
- It can only be used for properties within the approved area.
- Eligible persons must be approved for home financing and meet all income requirements.
- The home must be occupied by the owner and the primary residence.
- Eligible persons must take a homebuyer education course.
If you are eligible and get the grant, you must be aware that grants can only be used for its authorized purpose. For example, in 2015 Wells Fargo announced a $4.75 million dollar home down payment grant program in St. Louis city. Under the rules, it could only be used in St. Louis city and applicants had to make less than “120 percent of the local area median income.”
Beware of “Free Money” Scams
If you receive an ad or phone call that says you qualify for “free” money grants where you never have to pay the money back, it’s most likely a scam. To protect yourself from scammers, follow these rules:
- Never give out your bank account information.
- Never pay any money for “free” grants.
- Never take “government” agency names and phone numbers at face value—always do your research.
If you believe you have been the victim of a scam, report it immediately. You can file a report with the FTC by filling out an online form. If you paid a fee for grant information, contact your state consumer protection office.