If you’ve been seriously shopping for a home, then you no doubt have some idea about the house and neighborhood you can afford and the money you want to put toward a down payment to keep your monthly payments manageable.

And it’s likely that during your search you’ve allowed a few compromises to creep into your thinking to make your homeownership dream come true, perhaps persuading yourself that adding 15 minutes to your commute in exchange for a bigger house wouldn’t be the end of the world. 

But before you nail down your home-shopping budget, don’t forget to explore housing assistance delivered in the form of a grant. Unlike a loan, a grant is money that acts as a subsidy to the recipient assuming certain obligations outlined by the Grantor are met by the recipient.  A grant can be used for a down payment, to offset your loan’s closing costs, or even buy that larger house with the extra bathroom you really want.

Sounds great, now show me the money, you say!

The good news is, first time homebuyer grants are out there. The bad news is, they’re not always easy to find.  

Use the following grant information to guide and assist you as you proceed down the homebuying trail. 

Who’s Got the Money?

The federal government, states, cities, private companies, and nonprofits believe that communities are strengthened through lasting and responsible homeownership. As such, they support and sponsor programs, including grants, to make homeownership more affordable.

As for who gets the money, it’s a fairly large tent covering all walks of life – first-time homebuyers, veterans, the elderly, single-moms, farmworkers, first-responders, teachers, people with disabilities, individuals and families who are experiencing homelessness, to name but a few. Indeed, if you’re drawing breath, and you’re not collecting seven figures in income, you may qualify for some kind of housing assistance grant. The point is, even if you don’t think you’ll qualify, you may, so don’t give up hope or become discouraged that help is only for the destitute.

Where Should You Start Looking?

The easiest place to start would be with your local mortgage lender. Ask if they know of any housing grants or down payment assistance programs. They may offer a lender buydown program, for example, where they may pay a portion of your interest for the first year or two of your loan. This results in benefits that are similar to a grant in that it helps you to purchase your home. If they don’t know what you’re talking about, move on until you find someone who does. 

Also, contact the city where you would like to live. Most cities have housing departments that run affordable/fair housing programs, often supported by federal and state funding. These same cities may have designated special assistance for areas of the city they’re seeking to rehabilitate.

For example, many cities receive Community Development Block Grants (CDBG), administered by the Department of Housing and Urban Development (HUD). In turn, cities receiving these grants disperse them through various programs and agencies to address a wide range of unique community development needs, which, of course, includes housing. HUD determines the amount of each CDBG grant by using a formula that weighs a wide range of unique community development needs.

Expand your search, as well, to include housing programs supported by your state. For instance, the California Housing Finance Agency provides a list of CalHFA-approved lenders that first-time buyers can contact to apply for a loan grant. In Texas, a similar agency, known as the Texas Department of Housing and Community Affairs (TDHCA), administers a variety of programs under such titles as the HOMEbuyer Assistance Program, Texas Bootstrap Loan Program, My First Texas Home and Texas Mortgage Credit Certificate Program.

Getting More Specific

--USDA

The USDA’s Rural Housing Repair Loans and Grants program provides loans and grants to very low-income homeowners (below 50 percent of the area median income) to repair, improve, modernize, or to remove health and safety hazards in their rural dwellings. Loans can be repaid over 20 years at a fixed 1 percent interest rate. Grants of up to $7,500 may be arranged for recipients who are 62 years of age or older and can be used only to pay for repairs and improvements to remove health and safety hazards. Loan/grant combinations may be arranged for applicants who can repay part of the cost. https://www.usda.gov/topics/rural/housing-assistance

--Mortgage Credit Certificate

Many states have their own version of the MCC, which basically provides you a dollar for dollar deduction off your federal income taxes, up to $2,000. If you don’t owe any federal taxes, however, the deduction won’t do you any good. By reducing your potential federal income tax liability, you may have more net spendable income to apply toward your monthly mortgage payment. Be sure to consult your tax advisor. 

https://www.ncsha.org/resource/mortgage-credit-certificate-program-qa/

--Good Neighbor Next Door

The Good Neighbor Next Door program, sponsored by the Department of Housing and Development, provides housing aid for law enforcement officers, firefighters, emergency medical technicians and pre-kindergarten through 12th-grade teachers.

Through this program, you can receive a discount of 50 percent on a home’s listed price in regions known as “revitalization areas.” Paying less than full price for a property is another form of a grant. You’re being granted a sizable price reduction that you don’t have to pay back.

Use the program’s website to search for properties available in your state. You must commit to living in the home for at least three years. https://www.hud.gov/program_offices/housing/sfh/reo/goodn/gnndabot

--Veterans Administration Housing Grants for Disabled Veterans

The VA provides grants to U.S. servicemembers and veterans with certain permanent and total service-connected disabilities to help purchase or construct an adapted home, or modify an existing home to accommodate a disability.

Two grant programs exist: The Specially Adapted Housing (SAH) grant and the Special Housing Adaptation (SHA) grant. The maximum amount available to adapt a family member's home for the SAH grant is $35,593 and for the SHA grant is $6,355. https://www.benefits.va.gov/homeloans/adaptedhousing.asp

***

The above list is by no means complete; rather, it’s a start. New assistance programs are forming all the time while others have expired or run their course after meeting a short-term need.

At the same time, while conducting your search for assistance, keep your guard up for websites or for-profit companies that promise to help you find any kind of funding you need for “a small fee.” Many of these organizations have names that imply an association or direct relationship with the U.S. government, when there’s no connection whatsoever. So, steer clear!

Again, your best route for seeking and finding grants to further your housing quest is to first work with professionals who have their feet firmly embedded on the ground in the areas where you want to live.  Start with your local lender or your city’s housing department. They should be knowledgeable about the current housing assistance programs for which you may be eligible.

Be persistent. While it’s true there are no free lunches, sometimes there is assistance with no obligation to pay back assuming certain requirements are met for those diligent and determined enough to go looking for it.

Any day is a good day to reduce your outstanding balances. This is especially true given that most American workers’ take-home pay recently rose as new, lower tax brackets took effect. For many, it has freed up the cash needed to start reducing their credit card debt. Here's how even this small amount can be used to make a big difference.

Achieving a Better Balance

Start by taking inventory. Determine how many different creditors you owe and the outstanding balances you carry from month to month. Then, note the interest rate you are charged on each. Once you have this information, you can start addressing your credit card debt.

Two popular and effective debt repayment strategies are the Snowball and Avalanche methods. With the Snowball strategy, you focus on paying off the smallest balance first, and then shift your attention to the card with the next-smallest balance. You achieve small victories quickly, which can help keep you motivated.

The snowball method also works if you’re just trying to pay off one credit card balance. In this case, you pay what you can reasonably afford above the minimum payment and keep paying that amount as your overall balance decreases each month. Over time, the amount of interest will shrink, and more of your payment will go toward repaying the balance.

The Avalanche strategy involves directing more of your funds toward the credit card with the highest interest rate until it's repaid. Then, you shift that payment amount to the card with the next-highest interest rate. If you have several cards, you eventually achieve an avalanche of payments, speeding up the repayment process.

Regardless of which strategy you choose, here are some suggestions to help you stay in repayment mode.

4 Tips for Keeping Yourself on Plan

1. Take a hard look at your credit card statements. When you pay your credit card bill each month in full, charging lunches and lattes has no added cost. Once you begin carrying balances, however, each charge starts accruing interest expenses. Ask yourself if you really need to be paying a finance charge on your gum and shampoo purchases.

2. Do the math when contemplating a purchase, especially when it’s on sale. Stop and think about how long it will realistically take you to pay it back if you use your credit card and what that means in terms of the additional interest expense. Chances are you’ll save more money in the long run by waiting until you can purchase the item outright, preferably at on sale at a future date.

3. Keep yourself accountable by not adding to existing debt. Leave your credit card at home or restrict yourself to cash only when you go to the store so you don’t have an easy way to pay for unplanned purchases. When at-home shopping tempts, keeping your credit card in a hard-to-reach spot, like a shoebox in the back of the closet, makes it harder to give in to impulse purchases.

4. Stay on track by making consistent payments. As your reduction program takes hold and you see your monthly credit card balance begin to retreat, refrain from increasing the outstanding balance to its previous levels.

Credit card debt allows many of us to experience and achieve things we would have delayed for another time, sooner. Forming a strategy for paying off those purchases and sticking to it still allows you to enjoy them while making future purchases more affordable.

Many young adults dream of making the switch from renting to owning a home. When these aspiring homeowners are also your kids, it's only natural to want to help. After all, it's what parents do. Fortunately, there are many options available to help accommodate student debt obligations and to help improve their credit, if needed.

Ready to get serious about homeownership? Then it’s probably time to start saving for a down payment. While down payments can seem like a challenge, they are really like any other goal you set for yourself, doable.

To succeed, think about the bigger goal in terms of smaller, more easily accomplished actions you can take to save money. Here are 12 things you can start doing today that can help you reach your goal, perhaps even within a year.

Nickel and Dime Yourself

Look at your expenses and what you’re spending money on, and then find opportunities to cut back. Try bringing lunch four days a week or carpooling to save gas money. Small cutbacks can really add up over time.

Set It and Forget It

Establish a high-yield savings account that is strictly for your down payment. You may even want to choose a bank separate from the one you normally use so you won’t be tempted to dip into your savings. Then, schedule an automatic transfer out of every paycheck into that account.

Up Your App Game

Find an app that will help you save and visualize your progress. Qapital links to your personal accounts and lets you establish “rules” based on your daily life. For example, you can set a weekly coffee budget and send the rest to savings when you come in under the amount.

Create a Waterfall

Concentrate on paying off high-interest debt, such as credit cards, one at a time. Once you pay one off, move to the next one. As you reduce your monthly debt payments, it should free up cash you can save for your down payment.

Get a Side Hustle

Whether it’s selling your knitted masterpieces on Etsy or driving for Lyft, divert the extra income toward your down payment.

Semi-retire Your 401K Contribution

Consider temporarily reducing your 401K contribution while you are saving for your down payment. Put aside the difference in your savings account until you’ve reached your goal. Once that happens, increase your contribution percentage to at least what it was previously.

Think Smaller

Decreasing your current housing expenses means you can put more away for a down payment. Moving to a smaller, less costly space for a short time can help you save money for a bigger, more permanent place to call home.

Ask to See the Benjamins

Include your relatives and friends in your savings goal. When a gift-receiving opportunity presents itself and you’re asked what you’d like for the occasion, answer, “Cash, please!”

Plan a Staycation

Instead of splurging on an expensive vacation this year, challenge yourself to find as many fun—inexpensive and free—things as you can to do and see in your hometown. With each ticket you don’t buy, or restaurant meal you don’t pay as much for, add to your savings account.

Hold a Real, or Virtual, Yard Sale

Letting go of those skis you haven’t used in five years will be easier if you know the profit will go toward a new home. Virtual sites like eBay and Facebook’s Marketplace make it easy to get your merchandise in front of potential buyers. It also means less to move!

Stash Your Raise

Congratulations! Your hard work over the past year was recognized. Now, pretend it never happened. Instead, continue to live off the amount of your old paycheck and put the remainder in your down payment savings account.

Look at All Your Options

Many organizations, such as the Federal Housing Authority, Veterans Administration, and U.S. Department of Housing and Urban Development, offer down payment assistance for qualifying borrowers. Taking advantage of one of these programs could greatly reduce the amount you’ll need to save and stretch the dollars you have accumulated.

Whether you follow all or just a few of these savings tips, achieving your savings goal could be easier than you think. They also could lead to your becoming a homeowner that much sooner.

 

 

 

image: http://www.newamericanagent.com/uploads/images/Housing_Forecast-b2c-infographic-notitle.jpg

There is a well-rooted perception that to buy a home, especially your first one, you should keep saving and renting until you can make a 20 percent down payment. Reality is far different and knowing your options may get you through the door to homeownership that much sooner.

Doing More with Less

Black Knight Financial Services reports that 1.5 million borrowers became homeowners in the 12 months ended June 2017 with down payments of less than 10 percent. Most of these loans were conventional, fixed-rate offerings made through the Fannie Mae, Freddie Mac, and FHA loan programs. Because these agencies are now able to accommodate this type of loan, close to 40 percent of all new mortgages are being made with low down payments.

Mortgage Programs	Minimum Down Payment
Conventional Loans	3–5 percent
Conventional Jumbo	10 percent
FHA Loans	3.5 percent
VA Loans	0 percent
USDA Loans	0 percent

Down payment requirements may differ for condo purchases or new construction.

Weighing the Trade-Off

While it’s possible to get into a home sooner with less money up front, mortgages made with low down payments do come with the added expense of mortgage insurance premiums until that 20 percent equity level is achieved. They also typically result in the borrower paying more interest over the life of the loan, which could make the ultimate cost of the home higher.

However, proceeding with a low down payment might still save you money over the long run. You will no longer be paying rent and may realize tax savings after deductions for your higher interest expense and property taxes. Potential gains in the home’s value can also make the earlier purchase and expenses worthwhile over time. So, it is important to consider how these varying factors may affect your near-term budget as well as the potential for a long-term gain in your net worth. In many cases, your Loan Officer or financial advisor can help you weigh the alternatives.

Next Steps

Going through the preapproval process with a Loan Officer is an effective way to gauge how much home you can buy—and afford—given different down payment scenarios. It will also help you engage the attention of a Real Estate Agent. Having a preapproval letter will ensure they view you as a serious buyer instead of an aspirational browser still building your savings.

When it comes to down payments, in today’s market it isn’t as much about the amount you put down as it is how much you can comfortably afford to owe. Once you know that, homeownership is in reach.

The following infographic will help you decide whether to do-it-yourself (DIY) or go seek professional help when things around your household need to be fixed or updated:

 

The prospect of moving is often accompanied by an emotional cocktail of excitement and anxiety over starting a new phase in life. It also leads to a list of to-dos to complete before the moving van pulls up.

Don’t stress! Here are ten tips to help keep you calm and in control of your move. After all, you have places to go.

1. Make a master list of what you need to do.

The first item should be to reserve a mover. Then, prioritize checking off items on the list each day. Also, consider making a bucket list for people and places you want to see or things you want to do before you leave. Try to work in as many of these activities as possible before you go.

2. Purge what you won’t use or need in your new place.

Many sites and services allow you to identify buyers for things you no longer want. Some services/apps, like Everything But the House, will even send someone to your home to conduct an online estate sale for you. ThredUp, a clothing reseller, will pay you a flat fee for your unwanted clothes. Similar options exist for books. For larger items, charitable organizations will often come to you to pick up used furniture and household goods.

3. Start collecting boxes.

Most grocery stores are happy to have you relieve them of boxes. Those left over from the liquor department are the best—not only are they reinforced, but they come with dividers to protect glass items.

4. Pack gradually.

Start packing unnecessary items as soon as possible. Gradually working room by room, makes it less overwhelming when you are packing a home you’ve lived in for a while. By moving day, you should be down to what you need with you as you travel to your new home.

5. Use cling wrap in new ways.

To protect against leakage, remove the caps of any open containers you are moving. Put the wrap over the opening and screw the cap back on. Cling wrap can also be used to “seal” dresser drawer contents so you don’t have to pack their contents separately.

6. Use smaller boxes for heavier items.

Limiting the weight of each item helps reduce the probability that the box will fail. Also, your back will thank you later.

7. Take photos of anything you are dismantling.

It helps to have a photo of any items that need to be broken down and reassembled in your new place. That way you’ll have a head start on putting it back together. It will also be easier to see if something is missing or a connector needs to be replaced.

8. Invest in bubble wrap.

Cushion fragile items with bubble wrap instead of newsprint or paper. It will keep your items cleaner. Where dishes are concerned, pack them on their sides rather than stacking them to reduce the risk of damage.

9. Label boxes.

The more specific you are, the easier it will be to unpack. At a minimum, label each box with the name of the room it is being moved to and number it. This way, you will know the order in which to unpack the boxes.

10. When it comes time to say goodbyes, don’t.

Friendships don’t have to end with a move. Instead, tell people you’ll see or talk to them later. Given apps like FaceTime and texting, it is easy to maintain relationships at a distance.