Government Grants for Housing Rare But Possible

brick buildings funded by government housing grants

As we've said often on this site, government grants for housing are really, really rare. The word grant implies that you don't have to repay the money, in contrast with a loan. Other forms of housing subsidy are much more common.

We're sorry to say that this page is totally U.S. centered. Governments worldwide provide many types of housing grants, subsidies, and incentives; such grants are more prevalent in Europe, for instance, than in the U.S., by a wide margin.

During the Great Recession we enjoyed some exceptions to that rule in the form of federal tax credits that have now expired. If your city is interested in awarding grants, check carefully to see if a state or federal program you once enjoyed is still available.

Another type of assistance that will not have to be repaid may come in the form of disaster relief, for victims of hurricanes, earthquakes, or wildfires.

But in ordinary situations and economic times, government grants for housing come with strings attached. The location or condition of the housing unit, your income or situation in life, or the home having been in foreclosure or forfeited for non-payment of taxes might  qualify you for some taxpayer assistance.

One common program is the provision of non-repayable grants to help households assemble a down payment. You could check to see if your state or local government is offering first-time homebuyer credits or other incentives. Often state housing agencies provide first-time homebuyer grants, but pass them through to a select few local banks or credit unions that administer the program. 

The quite flexible federal HOME Investment Partnerships money that is awarded automatically to states and some localities based on need can be used for homebuyer assistance if that is the local government's choice.  All of this funding must be used to assist low-income and very-low-income households.

State and local jurisdictions administer this program, and program rules are inconsistent from place to place, and from time to time.

Public Housing: The Most Common Exception to Our Warning That There Is No Grant Money

The longstanding exception to the rule of thumb that there are no such things as government grants is public housing itself, which essentially comes in two forms in the U.S.:

  1. Public housing where a local housing authority provides housing in complexes or at scattered locations throughout the community, with the rental payment capped at 30% of household income, no matter how low, and
  2. Housing Choice Vouchers that let tenants find their own housing if they find a landlord that will work within government guidelines.

To learn how these programs operate, contact a local agency called the "housing authority."  In spite of the fact that the dollars behind these programs are federal funds, the administration is local.  Cities and counties are allowed to decide whether to form housing authorities, so an urbanized county could conceivably have a county housing authority and one or more municipal housing authorities operating within its boundaries.

Possible State and Local Funding Sources

Lastly, please check with your local city or county government. Many of them used their federal Neighborhood Stabilization Program money to provide actual grants to people purchasing foreclosures, but that program is closed almost everywhere. From time to time, a local government may offer homes for sale at a very substantial discount, which would be equivalent to receiving a grant for housing.

For instance, tax forfeiture properties are available for purchase from a county government, usually for very modest prices, or even $1 in the occasional aggressive program. It's also worth checking into whether any local land banks offer discounted housing that they have acquired other than through non-payment of taxes. Some of these entities are non-profit corporations of some type rather than governments as such; others are overloaded government bureaucracies.

Conceivably, some local governments offer grants to particular income levels or in specific neighborhoods through their regular Community Development Block Grant program.

Lastly, a particular local government might offer a limited-time cash incentive for home purchase for particular buyers or neighborhoods, or they might even have corporation or foundation money to write down the costs of certain kinds of housing. It's worth checking with city government.

Learning More About Government Grants for Housing

Never pay for information about government grants for housing, and don't trust a commercial website more than you trust the government agency. Unfortunately, sometimes federal, state, and local governments let their website information grow stale, so a phone inquiry is always best after you've done a little background checking on the Internet.

For any federal program we refer to, call the Department of Housing and Urban Development at 800-255-5342. To locate most state housing agencies, click the link in this sentence.

On this page, we confined ourselves to these few opportunities for government grants for housing. For a much more complete overview of the many ways that governments at various levels might subsidize your purchase of a home or your rent through making loans more affordable, offering free or low-interest loans for home repairs, and so forth, please see the much longer page on government housing assistance in general.

Learn More About Topics Related to Affordable Housing 

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