Uncle Sam Will Cover Your Downpayment and Closing – and Then Fix up the House!
In 2002, a report published by the U.S. Department of Housing and Urban Development declared that “downpayment and closing costs are often the single greatest barrier to homeownership.”
The report also said that minorities are particularly hard-hit, as they are 30% less likely to become homeowners.
Uncle Sam knows that America is a stronger nation when more people own their own homes. To help increase the number of home-owners, the Federal government plans to give away 200 million dollars to 40,000 buyers every year.
A new program, called The American Dream Downpayment Act (ADDI), was signed by President Bush in December, 2003 to help people who are strapped for cash become home-owners. It is part of the U.S. Department of Housing and Urban Development (HUD), and funds will be available until 2007. ADDI provides money for the down payment, closing costs and rehabilitation expenses. You do not have to pay this back. The amount of money available varies according to location, but will not exceed $10,000 or six percent of the purchase price.
The rules are easy as 1,2,3:
1. You must be a new home-owner, which HUD defines as anyone who has not owned a home in the last three years.
2. Rehabilitation projects must be completed within the first year of ownership.
3. And, there is an income requirement – you cannot earn more than 80% of your area’s median income.
For more information, visit the HUD website at www.hud.gov, or contact them at
U.S. Department of Housing and Urban Development
451 7th St NW
Washington DC 20410
Telephone (202) 708-1112
TTY: (202) 708-1455
Serving Those Who Serve – In the Military, on the Streets, and in the Classroom
In addition to the programs through HUD, Uncle Sam also provides gifts and incentives for people involved in certain professions. Policemen and teachers have access to Federal grants, and the Veterans Administration (VA) provides downpayments for members of the military. And, the VA no longer requires the buyer to be a first-time owner.
Down payment Assistant Programs Give Money Away There are scores of nonprofit organizations that make money available as outright gifts to help homebuyers with down payment and closing costs. The gifts are called Down payment Assistant Programs (DAPs).
The money that is available to help you buy a house through DAPS is free. There are no strings attached. You will never have to pay it back.
Why is this money available? Most organizations provide these funds to encourage home-ownership in America. It is that simple. If you are a first time buyer and need extra funds to meet the up-front expenses, you are the person they want to work with.
You will need to do a little homework, however, to make sure you qualify for these programs. And, once you qualify, you need to follow a set of specific steps – these are outlined next.
Do You Qualify?Qualification guidelines vary with each program, but here are some basics that most of them require:
• Buyers must qualify for an eligible loan program, which is usually through the FHA
• The seller must agree to work with the organization
• Some organizations may require you to complete a Home Ownership Counseling Course or provide 1% of your own funds for the transaction.
• Some are only eligible in targeted zip codes
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