• New York offers grants for first-time home buyers.house image by Cora Reed from Fotolia.com
  
  For most people, the most challenging part of purchasing a new home is coming up with the down payment or closing costs. To help stimulate the economy and assist those wanting to purchase a home, the government issues first-time home buyer grants to qualifying applicants, which is essentially free money that never has to be repaid. The most important qualifying factor is income; this amount is dependent on the median income in the area of the new home. Credit ratings of the buyers, the location of the home and the amount of the loan are all considered when applying for a grant.
  
  

Federal Grants

• Federal first-time home buyer grants are given by the Homes and Communities Program administered by the Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD). While HUD does not deal directly with the individual, it does work through local governments to offer financial assistance to those who qualify for a federal grant. Those who are looking to purchase a home for the first time must pre-qualify for an FHA loan before being considered for a grant.
  
  The AmeriDream Program is a FHA down payment grant for first-time home buyers. This particular grant was established to help those who have qualified for a loan but don't have the funds available for a down payment or closing costs. A gift of up to 10% of the purchase price of the home is given; however, according to fha.com, "this amount is typically between 3% and 6%."
  
  The Nehemiah Program is a down payment grant assistance program offered to any home buyer, regardless of annual income, as long as the buyer has been approved for an FHA loan. An amount of up to 6% of the purchase price of the home can be given, without ever having to be repaid.
  
  

State Grants

• New York offers government-issued grants for first-time home buyers residing in the state. The New York State Housing Finance Agency can grant cash for up to 5% of the loan amount. This grant originates as a loan, but according to first-time-home-buyers.com, "it turns into a grant, which does not require repayment and is completely forgiven after a period of time" in which the buyer lives in the home.
  
  The New York State Affordable Housing Corp. (AHC) provides grants through the Affordable Home Ownership Development Program (AHOD). This money is provided to governmental and nonprofit organizations to assist low- to moderate-income families with the purchase of a new home.
  
  

Local Grants

• To recruit talented young employees to the local business community, Long Island began a first-time home buyers grant program targeted for college graduates, municipal employees, hospital staff and other professionals. This is a $25 million state grant fund, which began in January 2007. Up until that time, grants were given only to buyers who had an annual income of less than 80% of the Long Island median income. A qualifying buyer can now make up to 130% of the Long Island median income and be considered for a grant up to $25,000.