Buying your first home allows you to start building equity in a place of your own. But with the rising cost of living, saving for a down payment can be challenging.
A first-time home buyer grant can help cover the upfront costs of purchasing a home. The best part is you don't have to repay the funds as long as you meet the program requirements. Let’s take a closer look at how these grants work, where to find them, and how to apply.
WHAT IS A HOME BUYER GRANT?
A home buyer grant is free money to help you cover the down payment and closing costs when purchasing a home. Unlike with a loan, a grant typically doesn't have to be repaid as long as you meet the program requirements.
You might be wondering, “How much is a first-time home buyer grant?” The amount varies depending on the program. Some may help to reduce the costs, while others offer enough to cover all of your down payment or closing costs.
Most grants require that you live in your home for a certain number of years to qualify. Additional requirements may apply, like buying a home in a certain area or completing a homeowner education course. If you move or refinance before the program requirements are met, you may have to repay part or all of the grant money you received.
HOW TO FIND HOME BUYER GRANTS IN UTAH
Before you start looking for the perfect home, be sure to see what grants you're eligible for.
Here’s where to look:
NONPROFIT ORGANIZATIONS
Nonprofit organizations like NeighborWorks America, local housing authorities, and community development organizations may offer first-time home buyer grants. HUD-approved housing counseling agencies in your area can connect you with available resources and provide free guidance.
LOCAL AND STATE GOVERNMENTS
Local towns and cities may offer home buyer grants to encourage community growth and revitalization. Eligibility is often based on income and living in the property for a certain number of years.
At the state level, the Utah Housing Corporation offers a first-time home buyer grant of up to $20,000 to purchase a newly constructed home valued at no more than $450,000. The funds can be used for the down payment, mortgage points to reduce the interest rate, and the closing costs.
FINANCIAL INSTITUTIONS
Many banks and credit unions offer their own grant programs to customers and members, so be sure to ask your lender what's available. For example, Wasatch Peaks offers the Home$tart grant, which is an excellent option for home buyers looking for down payment and closing cost assistance.
HOW TO QUALIFY FOR FIRST-TIME HOME BUYER GRANTS
Wasatch Peaks' Home$tart Grant is designed to make homeownership more affordable and accessible for first-time home buyers. It provides a $15,000 down payment or closing cost assistance grant to eligible borrowers.
Here’s how you qualify:
- The home must be your primary residence: Investment homes are not eligible.
- You must be a first-time home buyer: You must not have owned a home in the past three years or be a current displaced homemaker.
- You must meet the income requirements: Your household income can't exceed 80% of the area median income.
- You must complete a home buyer education course: The course must be completed before the closing. It helps ensure you are ready for both the financial and practical aspects of owning a home.
Home$tart isn’t a loan. It’s a grant that does not have to be repaid as long as you live in the home you are buying for at least five years. Keep in mind, however, that if you sell your home before that time, you may have to repay some or all of the funds.
HOW TO APPLY FOR A HOME$TART GRANT
If you’re wondering, “How do I get a first-time home buyer grant?”. The first step is to apply. A Wasatch Peaks loan officer will guide you through the process.
Here’s how to get started:
1. GATHER REQUIRED DOCUMENTS
Make sure you have all of your documents before you apply to ensure a smooth process.
You’ll need:
- Government-issued photo ID
- Proof of income (pay stubs, tax returns, etc.)
- Bank statements
- Debt information (credit cards, student loans, etc.)
- Asset information (investment, retirement, and other accounts)
- Employment history
2. CONTACT A WASATCH PEAKS LOAN OFFICER
Give us a call or stop by a branch. Our friendly mortgage loan officers will walk you through the Home$tart program and determine whether you qualify. They'll also guide you through the application process and answer any questions you may have.
You can also use this opportunity to apply for mortgage preapproval. This is when a loan officer does a preliminary review of your finances and gives you an estimate of what you qualify to borrow. It helps you narrow your search for homes you know you can afford, and it can also give you an edge in the negotiation process.
3. APPLY FOR A MORTGAGE
A Wasatch Peaks loan officer will help you determine the best mortgage loan for your needs (conventional, FHA, USDA, VA). Once your application is submitted, a credit check will be performed. The underwriting process typically takes 30 to 45 days to complete.
4. APPLY FOR A HOME$TART GRANT
Before you can apply for a Home$tart Grant, you must have already signed a purchase and sale agreement. You'll also need to complete an approved home buyer education course, which covers budgeting, mortgages, and other homeownership essentials. Courses are offered in person and online.
5. CLOSE ON THE LOAN
The mortgage closing date will be scheduled. If you are approved for a Home$tart Grant, the funds will be applied to your closing costs. Be sure to review all documents before signing.
6. MAINTAIN RESIDENCY
It’s time to celebrate – you’re now a homeowner! Be sure to live in your home for the required five years so the grant will be fully forgiven.
GET THE KEYS TO YOUR NEW HOME
First-time home buyer grants make it much easier to become a homeowner. Start exploring your options, including grant opportunities from nonprofit organizations, local and state governments, and Wasatch Peaks' Home$tart Grant.
Ready to get started? Our team is here to help. Click below to learn more about how a Home$tart Grant can help you become a homeowner for less.
