Mortgage Grants & Schemes

A poor credit score and shaky financial history can make it difficult to be approved for a home loan, and a high amount of debt can make it a challenge to come up with a sizeable down payment. If you’re already a homeowner, a sudden job loss or medical emergency can slash your income and quickly lead to difficulty making your mortgage payments on time and in full each month.

Thankfully, there are certain mortgage programs and grants available to help those who are having some trouble with their mortgages.

Mortgage payment grants typically come from state and local agencies, as well as from nonprofit organizations that obtain federal funds. Through the US Department of Housing and Urban Development (HUD), this federal government agency provides mortgage payment assistance to those who are having financial difficulties. While competitive in nature, such mortgage grants can help homeowners make their payments and effectively prevent foreclosure.

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About Mortgage Grants and Schemes

A mortgage grant is a monetary award that doesn’t have to be repaid. In fact, it’s this lack of repayment that distinguishes them from loans. The awarded funds can only be used for the initial intended purpose, and as such, homeowners will need to provide updates on occasion to show how the granted funds have been used.

The applications for mortgage grants are somewhat complicated and in-depth. Missing pieces of information or providing inaccurate data could lead to a denied application. However, with millions of dollars in grant funds made available every year, it’s still possible to get approved. Certain qualifications need to be met, such as being a minority or having low income.

Schemes can involve monetary awards that don’t need to be paid back, as well as specialized programs that make housing much more affordable, whether it’s through discounted housing prices or easier mortgage payment options.

The programs that are offered are typically state- and locally-based. The following are just some of the mortgage grant and scheme programs available out there for those who are in need and qualify.

Mortgage Foreclosure Prevention Program

Offered by the Twin Cities Habitat for Humanity, the Mortgage Foreclosure Prevention Program helps homeowners avoid the foreclosure process through monetary assistance. Twin Cities Habitat for Humanity is one of only three Habitat arms in the US that offers a Foreclosure Prevention Program.

The agency offers counseling and referrals at no charge to homeowners who have been unable to meet their mortgage payments, HOA fees, or property taxes. Over 6,500 families have been helped since the agency’s inception. The program currently has about $35,000 in funds available for those who are eligible.

Taking steps to avoid foreclosure is crucial, as the ramifications of such an event can wreak havoc on a person’s financial health for a few years, and therefore have an impact on the ability to secure any purchases under credit. Programs such as these should be sought after if eligible in order to avoid foreclosure.

Housing Grants for Single Mothers

Single mothers who are finding themselves struggling to make payments towards their mortgages may find some assistance through grant programs. While free housing grants for helping single mothers don’t necessarily exist on a national level, they are offered on a more local level. Housing assistance programs typically fall under the categories of first-time buyers, low-income buyers, and rural-area buyers. Since single mothers can typically fall under any one of these categories, there are different options available to get some help paying for a home.

Community Block Development Grants, in particular, are available to help single mothers, as well as other demographics struggling with their mortgage payments. These grants are awarded each year to local and state bodies.

American Dream Down Payment for Minorities

The American Dream Down Payment program is specially designed to assist low-income families and minorities who are trying to buy their first home. The program helps by assisting with the initial up-front costs of buying a home, such as the down payment, deal closing costs, and any necessary repairs that the home might require.

The amount of the grant cannot exceed 6% of the total purchase price of the home, or $10,000 dollars, whichever of the two is greater. In order to be eligible for the grant program, you must be entering the housing market for the first time, and your income cannot exceed over 80% of the median income in your community. In addition, the money granted from the American Dream Down Payment program can only be used to buy either a 1-4 family home, cooperative housing, condominium, or manufactured home.

Starter Home Scheme for Young First-Time Buyers

Available in the UK, the Starter Home scheme is a new government program whereby 200,000 newly constructed homes are available to first-time homebuyers under the age of 40 years. The program helps buyers get at least 20% off the current market price of a home. The caveat is that the discounted price for the properties should not be over £450,000 in London, and over £250,000 outside of London.

This can be a great way to save a large amount of money off the regular price of a home, and effectively reduce your mortgage payments. Not only will the loan amount be reduced, but so will the interest payments over the term of the loan, which could effectively translate into tens of thousands of dollars saved.

Help to Buy Scheme for First-Time Buyers

Also available in the UK, the Help to Buy equity loan scheme offered through Nationwide is available through the Homes and Communities Agency for First Time Buyers. These specialized home equity loans can offer first-time homebuyers the extra funds needed for a deposit that must be put down towards the purchase of a new home. With a 5% deposit, an additional 20% (or 40% in Greater London) can be borrowed through the Help to Buy equity program to be put towards the purchase price of a property. Following this, you would be eligible to apply for a Nationwide mortgage of up to 75% (or 55% for Greater London) of the home’s purchase price.

These specialized home equity loans are not charged any interest for 5 years. Once this time period expires, you’ll be obligated to pay a monthly interest charge in addition to your monthly mortgage payments. Should you sell your home, you will also have to repay the outstanding balance on the equity loan.

A mortgage grant or scheme can be the perfect way to help pay for a home comfortably without risking default or foreclosure.