The high cost of a place to live is one of the greatest financial burdens faced by today’s American families. 11 million Americans are spending more than half their income on their home, another 21.3 million are spending more than the recommended 30%, and with rent and mortgage costs consistently rising faster than wages, these figures look set to increase.[1]
For many of these families, a little help at the right time can mean the difference between keeping a home and losing it or can allow a family to spare money for other vital expenses. Government and private grant programs to help families burdened by housing costs are available, and if you are among those struggling to pay rent or a mortgage, you should be looking into possibilities for help.
Before we go into the available grants and assistance programs, let’s look at what a grant is.
A grant provides direct financial assistance to a qualified person, usually someone facing immediate financial need. Most government housing grant programs in the United States are funded by the U.S Department of Housing and Urban Development (HUD), though they are often administered by local authorities. Some private organizations also offer assistance to those in need. I every case there will be an application process that determines whether you are qualified to receive assistance. This process will require you to provide information on your income, assets, family members, citizenship status, and often more. Applications may seem daunting at first, but they are manageable, and in many cases, the granting agencies provide assistance in completing them. If the program provides you with the help you need, it’s well worth the effort it takes.
Let’s look at some grant options.
Section 8 Housing Choice Vouchers are the primary housing assistance program of the US Government. The program provides direct financial support to help elderly, low income, and disabled families move into better homes than they could otherwise afford. Housing options include privately owned single-family homes, townhouses, and apartments: vouchers are not for use in government housing projects. The local Public Housing Agency (PHA) determines eligibility for vouchers, and criteria do vary in different areas. The family’s income must not exceed 50% of the median income for their county of residence. Once a PHA approves a family for the voucher program, the family must find a rental unit that meets program requirements with a property owner that is willing to accept the vouchers. The government then pays the property owner directly, with recipients expected to pay no more than 30% of their income as their contribution.
Operation HOPE helps low to moderate-income families get the funds they need for purchasing a home. Their Home Buyer’s Program also provides useful information and resources for low-income families on topics such as:
FDIC Loan Products or lending programs.
FHA Loan Programs.
Down Payment Assistance Programs.
Realtors who are trained and committed to assisting low-income homebuyers.
First time home buying programs designed for individuals with low or moderate income.
Operation HOPE’s Home Buyer’s Program also hosts workshops that help individuals gain a better understanding of the home buying process, which can be a major asset for first time homebuyers and others with limited experience. To find out more about the Home Buyer’s Program as well as other programs, visit Operation HOPE’s website.
FHA, Rural Housing, and VA-Guaranteed Home Loans
Federal Housing Administration (FHA) Loans offer mortgage insurance, which protects the lender from any losses if the borrower fails to make payments on their loan. That insurance means lenders can offer loans at lower interest rates and with flexible qualification requirements, which makes the loans cheaper and easier to get.
The FHA does not lend money. It works with approved lenders to insure loans. Individuals who want to apply for an FHA loan must first complete an application with an approved FHA lender. The borrower must be able to pay a down payment, make mortgage payments, and meet all eligibility and credit requirements. An FHA loan is one of the easiest loans to obtain due to its low credit score requirements and low down payments.
Rural Housing Loans offer individuals living in rural areas a chance to build, buy, or improve a residence. In some cases, these loans can be used to refinance homes. To qualify, you must live in a rural area, have a very low to moderate income, be without adequate housing but able to make payments, be a U.S. citizen and have a decent credit history.
The program offers two options, direct and guaranteed loans. Direct Rural Housing Loans are repaid over a period of 33 to 38 years and are available to applicants with annual incomes below 60 percent of the median income of their area. Direct loans offer payment assistance by reducing loan interest rates to as low as 1%, depending on the family’s income. Guaranteed Rural Housing Loans are paid over a period of 30 years with a fixed interest rate. There is no required down payment, and lenders determine the ability to repay, based on the family’s income.
VA-Guaranteed Loans are for eligible service members, veterans, reservists, National Guard members, and in some cases, surviving spouses. The loans can help eligible individuals to:
Purchase or build a home.
Retain or keep a home.
Renovate, repair, or improve a residence.
Buy a condominium unit.
Refinance a loan.
Install solar heating, cooling, or energy efficient systems.
There are service requirements and specific periods of eligibility. Applicants must also have a good credit rating, sufficient income, a valid Certificate of Eligibility (COE), and must agree to live in the property. You can visit the VA home loan website to see if you qualify.
Habitat for Humanity is a private organization that helps low-income families find affordable homes. Volunteers build houses in communities where is difficult for low-income families to find appropriate homes, and Habitat for Humanity provides mortgages to low-income families that are calculated to allow the family to buy a safe, decent home for 30% of their income.
There are many more programs available to families in need. Your local Public Housing Authority will have details on programs in your area and is an excellent starting point. Many private organizations operate only in specific regions, so it’s always worth running internet searches to find programs specific to your town, city, county, or state. It’s not always easy to find help, as the programs are limited and there are many people in need, but it’s always worth trying, especially if your need is severe or if your household includes children, elderly members, or disabled members, who often receive priority access to assistance programs. Good luck in your search!
Contact Links
Here are links to the assistance programs discussed in this article:
Information on HUD Grants
Grant Application and Process
FDIC Loan Products
Federal Housing or FHA Loan Programs
Down Payment Assistance Programs
Operation HOPE
FHA Loans and Mortgage
Rural Housing Loans
VA Housing Loans
Housing Choice Vouchers (Section 8)
Habitat for Humanity