American Dream Downpayment Assistance Initiative (ADDI)
The American Dream Downpayment Assistance Initiative authorizes up to $200 million annually around the country for downpayment assistance. To be eligible for ADDI assistance, individuals must be first-time home buyers interested in purchasing single family housing. A first-time home buyer is defined as an individual and his or her spouse who have not owned a home during the three-year period prior to the purchase of a home with ADDI assistance. ADDI funds may be used to purchase one- to four- family housing, condominium unit, cooperative unit, or manufactured housing. Individuals who qualify for ADDI assistance must have incomes not exceeding 80 percent of area median income. ADDI provides funds to all states and to local participating jurisdictions that have a population of at least 150,000. For more information:
U.S. Department of Housing and Urban Development (HUD)
451 7th Street S.W., Washington, DC 20410
Telephone: (202) 708-1112
TTY: (202) 708-1455
Zero Downpayment Act
Zero Downpayment Act eliminates the downpayment requirement for families and individuals who buy homes with Federal Housing Authority (FHA) insured mortgages. The Zero Downpayment Act offers opportunities for first-time home buyers who do not hold enough savings for downpayments, who meet FHA’s underwriting requirements, and who can easily afford monthly mortgage payments. The zero down plan is different from assistance programs like the American Dream Downpayment Act. Instead of granting a lump-sum award to qualified homeowners, FHA charges a modestly higher insurance premium to lenders on its zero down loans. Contact HUD for more information.
Energy Efficient Mortgage (EEM) program GO »
FHA's Energy Efficient Mortgage program helps homebuyers or homeowners save money on utility bills by enabling them to finance the cost of adding energy efficiency features to new or existing housing as part of their FHA-insured home purchase or refinancing mortgage. FHA EEMs provide mortgage insurance for a person to purchase or refinance a principal residence and incorporate the cost of energy efficient improvements into the mortgage. The borrower does not have to qualify for the additional money and does not make a downpayment on it. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, or savings and loan association, and the mortgage is insured by HUD.
Other Federal Housing Assistance Programs
Teacher Next Door program
HUD designed this program to encourage teachers to buy homes in low- to moderate-income areas. Those who work full time for a public school, private school, or federal, state, county or city educational agency as a state-certified, classroom teacher or administrator in grades K-12 may qualify. You must be in good standing with your employer.
Your employer must certify that you are a full-time teacher or school administrator. You don't have to be a first-time home buyer to participate. However, you cannot own any other home at the time you close on your home. You must agree to live in the HUD home as your only residence for three years after you move into it. www.fhainfo.com/teachernextdoor.htm
HUD’s HOME program
HOME provides grants to states and localities. Communities use this money, often working with local nonprofit groups, to fund a wide range of activities that build, buy, and/or rehabilitate affordable housing for rent or homeownership or to provide direct rental assistance to low-income people. The eligibility of households for HOME assistance varies. For rental housing and rental assistance, at least 90 percent of benefiting families must have incomes that are no more than 60 percent of the HUD-adjusted median family income for the area. HOME income limits are published each year by HUD. For more information: www.hud.gov/offices/cpd/affordablehousing/programs/home/index.cfm
Additional HUD Resources
HUD Mortgage Insurance Programs www.hud.gov/buying/loans.cfm
HUD Good Neighbor Next Door Program www.hud.gov/offices/hsg/sfh/reo/goodn/gnndabot.cfm
HUD Public Housing Homeownership Programs www.hud.gov/offices/pih/centers/sac/homeownership/index.cfm
State home buying programs www.hud.gov/buying/localbuying.cfm
State and Local Programs
Local government programs
Other special programs are administered by state and local housing finance administrations, state and local government agencies or even private organizations. Call your local government housing office and ask to speak with someone who can give you information about downpayment assistance or other housing programs that are offered in your area, and which lenders offer these programs. Some programs require the downpayment funds to be repaid, while others do not. Typically these programs vary from community to community and may have guidelines, such as a maximum borrower income.
Home buyer education programs are offered through lenders and mortgage insurance companies. With some of these programs, a lower downpayment will be allowed after completion of a home buyer education course, which can be offered online or in a lender's office.
Other special loan programs
You may be able to obtain reduced interest rates through bond money programs. Your lender should be familiar with any bond money programs that are available in your area. State or local agencies issue bonds and use the proceeds to help qualify loan applications. Be sure to ask your lender what other programs are available in your area especially for first-time home buyers.
Disclaimer: Although MBA tries to keep its listings current, government programs often change. New programs may be added; existing programs may be modified or eliminated. You should check with a lender experienced in state and/or federal housing programs to determine the availability of, and your eligibility for, government programs.