Federal Grants for First Time Home Buyers

House with a sold signFederal Home Loan Bank
system provides its members (members
include thrift institutions, credit unions, commercial banks, insurance companies, and certified community development financial
institutions, with a source of funding for mortgages and other
housing projects and community development.

The Federal Home Loan Bank
system is composed of 11 regional Banks
consisting of more than 7,300 member financial institutions. Each
area Bank offers grant money to first time home buyers. The
definition of a first time home buyer is defined by the Department
of Housing and Urban Development (HUD) as:

  • an individual who meets any of the following criteria:
  • An individual who has had no ownership in a principal
    residence during the 3-year period ending on the date of
    purchase of the property. This includes a spouse (if either
    meets the above test, they are considered first-time home
    buyers).
  • An individual who is a displaced homemaker and has only
    owned a principal residence with a spouse.
  • A single parent who has only owned a principal residence
    with a former spouse while married.
  • An individual who has only owned a property that was not in
    compliance with state, local or model building codes and that
    cannot be brought into compliance for less than the cost of
    constructing a permanent structure
  • An individual who has only owned a principal residence not
    permanently affixed to a permanent foundation in accordance with
    applicable

Most Federal Home Loan Bank programs are offered as a forgivable
loan. Each year 20% of the assistance grant will be forgiven. If the
house is sold or refinanced within a 5 year time period, the
assistance grant will be prorated and paid back to the Federal Home
Loan Bank. After 5 years, the home buyer assistance is FREE!

The grant money is always first come first serve. Grant money is
available to member banks of the Federal Home Loan Bank district.

The Federal Home Loan Banks provides the grant money to applicants
whose household income is at or below 80% of the area median income.
Determining household income should be left to a loan officer,
however, the following will satisfy your curiosity if you might
qualify for grant money.

Go to the
household income lookup and select the current year.

Median income lookup

Choose the Access Individual Income Limits Area link

Access Individual Income Limits Area

The next screen will prompt you to select the state

Household income limits by state

After selecting the state, select the county
Household income by county

The result will display the HUD median income limits. The grant
programs all use 80% of the median income by household members.

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Household income by household members

First time home buyer grants in Arizona, California, Nevada,
and other states where Bank members do business

The Workforce Initiative Subsidy for Home ownership (WISH) and
the Individual Development and Empowerment Account (IDEA) program
provides a 3 to one match for the down payment and or closing costs.

For every dollar the applicant invests into the purchase for the
down payment and/or closing costs, the Federal Home Loan Bank of San
Francisco will match the investment with three dollars. If you use
$3,000 to purchase the home, the Home Loan Bank will put in $9,000.
If you use $5,000, the Home loan Bank will match your investment
with $15,000.

First time home buyer program for New Jersey, New York, Puerto
Rico, and the U.S. Virgin Islands

The Federal Home Loan Bank of New York will not buy you a free
lunch, but the Federal Home Loan Bank of New York will give you free
grant money if you qualify for the First Home Club grant program.
Eligible home buyers can receive an assistance grant up to $7,500
for the down payment and or closing costs. The Federal Home Loan
Bank of New York will “match” the home buyer’s down payment/closing
cost investment 4 to 1. In other words, the Federal Home Loan Bank
will grant/gift four dollars for every dollar that the home buyer
uses for the down payment or closing costs. For example, if the home
buyer pays $1,000 toward the purchase, the FHLB will grant/gift
$4,000. You will receive the maximum grant of $7,500 if you use
$1,880.00 toward the purchase.

The prospective home buyer(s) are required to open a dedicated
savings account with a participating lender and agree to save the
buyer’s contribution on a monthly basis for a minimum of 10 months
to a maximum of 24 months.

First time home buyer program for Pennsylvania, Delaware, and
West Virginia.

The Federal Home Loan Bank of Pittsburgh provides grant
assistance as a 3 to 1 match. For every dollar that you put into the
purchase of the home, the Federal Home Loan Bank will grant three
dollars. For example, if you pay $1,000 toward the purchase of the
home, you would receive $3,000. The maximum grant is $5,000. Doing a
little math, that means that if you pay $1,667, you would receive
$5,000. Applicants are required to meet the income limits.
Read more
about the First Front Door grant program

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First time home buyer program for Alabama, Florida, Georgia,
Maryland, North Carolina, South Carolina, Virginia, and the District
of Columbia

If you meet the income requirements, have not owned a home
within the past three years and satisfy the customary approval
guidelines, you might be eligible for a $5,000 down payment and/or
closing cost assistant loan from the Federal Home Loan Bank of
Atlanta.

The First-time Homebuyer Product (FHP) is a four to one matching
grant up to a maximum subsidy of $5,000. The home buyer must
contribute at least $1,000 towards the home purchase. Each year, 20%
of the assistance grant is forgiven. There is no repayment after 5
years of ownership. No monthly payment is required on the assistance
loan.

Also available is the Community Partners assistance program

The Community Partner’s program is similar to the First-time
Homebuyer Product, however, this program is dedicated to current or
retired law enforcement officers, educators, firefighters, health
care workers, and other first responders who are first-time home
buyers or non-first-time home buyers. The down payment/closing cost
assistance with this program is up to $7,500. The program is a 4
dollar to one dollar match.

First time home buyer grants for Ohio, Kentucky and Tennessee

The Welcome Home Program is offered through the Federal Home Loan
Bank of Cincinnati. The grant program provides up to $5,000 for the
down payment and/or closing costs. 20% of the assistant grant is
forgiven each year, up to 5 years, at which time the assistance
grant is forgiven. The borrower is required to repay all, or a
portion, of the subsidy, if the home is sold or refinanced within
five years from the closing of the transaction.

Home buyers must contribute at least $500 of their own funds towards
down payment and/or closing costs.

Applicants are not required to be first-time home buyers. However,
all first-time home buyers are required to complete a home ownership
counseling program.

First time home buyer grants for Alaska, Guam, Northern Marianas,
American Samoa, Hawaii, Idaho, Iowa, Minnesota, Missouri, Montana,
North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming

Qualified home buyers can may receive up to $7,500 with the
Home$tart grant program from the Federal Home Loan Bank of Des Moine.
Home$tart Plus participants may receive up to $15,000 in grant
funds. Applicants must have a signed Purchase and Sale Agreement to
enroll in Home$tart and Home$tart Plus programs.

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First time home buyer grants for Indiana and Michigan

The Federal Home Loan Bank of Indianapolis offers the
Homeownership Opportunity Program (HOP) to qualifying first-time
homebuyers whose household income is at or below 80% Area Median
Income (AMI). Qualifying households could possibly receive up to
$8,000 in down payment and or closing cost assistance with a
mortgage from an FHLBank Indianapolis member.

Applicants must contribute at least contribute a minimum of $1,000
towards the purchase of the home. The assistance grant is a 3 to
match, For every dollar the applicant invests into the purchase, the
Federal Home Loan Bank will provide 3 dollars. Invest $1,000 toward
the down payment or closing costs and receive $3,000. The
homebuyer(s) must complete a counseling/education program prior to
the loan closing.

First time home buyer program for Colorado, Kansas, Nebraska or
Oklahoma

The Federal Home Loan Bank of Topeka will provide up to $5,000 in
down payment and or closing cost assistance to eligible home buyers.
The Homeownership Set-aside Program (HSP) requires applicants to
contribute at least $500.00 towards down payment, closing costs or
costs paid before closing as identified on the Closing Disclosure.

Eligible properties include single-family dwellings, townhouses,
condominiums, cooperative housing units or manufactured housing
(must be affixed to a permanent foundation and titled as real
estate) to be used as the homebuyer’s primary residence.

First time home buyer grant for Illinois or Wisconsin

Federal Home Loan Bank of Chicago provides an assistance grant to
eligible home buyers in Illinois and Wisconsin through member banks.
The Down payment Plus® program is a 3 to 1 down payment/closing cost
match. That means that for every dollar the home buyer/applicant
uses toward the down payment and or closing costs, the Federal Home
Loan Bank of Chicago will match the home buyer’s investment with 3
dollars. The borrower must make a minimum contribute of $1,000 from
their personal funds toward the purchase of the home. The maximum
grant amount is $6,000. That means if you invest $2,000 toward the
purchase, the Federal Home Loan Bank of Chicago will provide $6,000
to help with the down payment, closing costs, escrow requirements
(i.e. property taxes and home owners insurance). Funds held in the
home buyer’s checking, savings, or other depository accounts for a
minimum of two most recent months may be used for the home buyer’s
contribution. Unverified funds are not acceptable for the home
buyer’s contribution.