Q: I’m purchasing a new home that’s being built and I close in March. Is there a way to get free money for closing costs or other expenses?
A: There are many opportunities for home-buyers, especially first-time purchasers, to get free money and other resources to buy a house.
First, there’s the federal tax credit available for those who close on a home by April 30, 2010 and close by July 1, 2010. The tax credit goes up to $8,000 for first-time buyers and up to $6,500 for repeat homebuyers. You don’t have to wait until you file your taxes to take advantage of this tax credit.
It can be applied in advance toward your closing cost or home down payment. Additionally, there are eight overall sources of aid you can turn to for financial and educational assistance in buying a home of your own. The eight sources include:
• Federal and/or National Programs
• State Aid
• County Initiatives
• Local/Municipal or City Efforts
• Non-Profit and Community-Based Organizations
• Lender-Specific Programs
• Programs Based on Your Job or Occupation
• Employer Assisted Housing Initiatives
It’s common for there to be overlap between programs. For instance, a state might offer aid to certain workers, such as teachers, fire fighters, or police officers or a community program might work closely with designated lenders or specific types of national mortgage loan programs.
As you read about the staggering array of financial assistance initiatives available nationwide, keep in mind an important trend that is emerging in many communities. Lenders are starting to permit borrowers to layer two, three, or more first-time buyer programs.
This means you get the benefit of multiple sources of aid – instead of just one – which allows you to offset higher home prices, and enter a new home in a stronger financial position.
Your First Home
For more information, check out chapter 4 of my book, Your First Home: The Smart Way to Get It and Keep It. The entire chapter is devoted to offering details on each of the eight types of homebuyer assistance programs listed above. It also provides specific listings – for every state in the country – of programs that offer free money to homebuyers.
