Grant Money Possibilities

If you’ve landed on this page looking for grant money. Let’s connect so I can share what grant options might be available for you.

However, as a homebuyer, there are excellent financing options available even if you have some funds for a down payment. For example:

  • FHA loans require as little as 3.5% down of the sales price.

  • First-time homebuyers may qualify for as little as a 3% down payment option.

  • VA loans (for Veterans, Active Duty, or National Guard members) require no down payment.

  • USDA Rural Development loans also offer no down payment for homes in eligible rural areas.

Keep in mind that specific loan programs may have additional guidelines based on your eligibility and the type of home you’re purchasing.

The reason I mention these down payment options is simple—many grant programs often come with higher interest rates compared to current market rates.

With that in mind, there are a few key factors that can determine whether you qualify for a grant. These include:

  • Credit Score: Do you have a FICO score above 640?

  • Income Limits: Do you earn too much?

Many conventional loan grant programs are based on Area Median Income (AMI) for a specific county.

  • If your income is under 80% of the AMI, you may qualify for discounted mortgage interest rates and reduced PMI (private mortgage insurance).

  • If your income is under 50% of the AMI, you could be eligible for closing cost credits, depending on your transaction.

Additionally, some grants are based on household income and family size, offering up to $15,000 in assistance. However, these funds are limited, and once they run out, applicants must wait until they are replenished.

Down Payment Assistance Programs

Many states also offer bond programs that provide grant opportunities, but these often come with restrictions based on household income and FICO scores.

While not grant programs, there are additional financing options to consider. Be sure to consult your tax advisor, but as a homebuyer, you may be able to borrow against your employer-sponsored 401(k) retirement plan. Additionally, some retirement programs allow withdrawals with reduced tax penalties if you are a first-time homebuyer.

Gifts

What to Know About Gift Documentation

If you’re receiving a cash gift for your down payment or closing costs, both Fannie Mae and Freddie Mac allow it — but the funds must be properly documented.

Step 1: Gift Letter

You’ll need a signed gift letter from the donor that includes:

  • Donor’s name and relationship to you

  • Exact dollar amount of the gift

  • Statement that the funds are a gift (not a loan)

  • Donor’s signature and date

Step 2: Verify the Transfer

The gift funds must be traceable. This can be documented in one of three ways:

  • Copy of the donor’s check and your bank statement showing the deposit

  • Copy of the donor’s withdrawal and your deposit slip

  • Wire transfer confirmation and your bank receipt

Step 3: Donor’s Source of Funds

In some cases, the donor may also need to provide proof of where the funds came from (such as a bank statement).

Tip: Always consult your lender before the transfer to make sure everything meets current documentation standards.

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