FHA allows certain approved grant programs to provide down payment assistance, even with the 203k Program. In some cases, it’s possible to buy a home under market value, use the 203k loan to fix up the property, and use grant money for the down payment and all or part of the closing costs. It’s also possible, in addition, to allow the seller to pay the closing costs while still receiving grant money for the down payment.
One cannot, however, assume that every grant program will work in conjunction with a renovation loan or the FHA’s 203k loan program. Some grant programs have their own renovation funds, and the grant authority must control renovation funds. This may conflict with the lender’s requirements to also require control over the same funds and these conflicts are not always resolvable.
Moreover, some grant programs have their own inspections associated with them, and homes in disrepair may not qualify even if the buyer intends to do renovations to the home.
Is your grant program out of money?
Yes, with the number of first time homebuyers being perhaps the largest segment of the buying market (aside from investors), many grant programs are running out of money.
Beware of scams trying to charge you money to find free money for you. You don’t need them – you can do the research yourself.
Most grant programs are for certain geographic areas. Once you’ve decided where you want to live, begin making some phone calls to see what down payment assistance or grants are available:
- Call the City or township to see if they have a grant program
- Call the County to see if they have a grant program
- Call the State to see if they have a grant program
There are also free websites that try to keep track of all of the grants for you. However, there are new grant programs coming about all the time, ones running out of money and getting new funds, and ones that are discontinued.
Getting a grant when getting a FHA 203k loan is possible – you just need to make sure that you do your research so that you can be sure you have full information about what is and what is not possible.Click to See the Latest Mortgage Rates»