While foreclosures can be purchased at a very low price some may still find that the costs of owning one can be prohibitive
. It is always good to know that there are ways of bringing down the cost of buying a distressed property through grants and assistance offered by the government.
There are numerous subsidies offered by the government to stimulate home ownership through the purchase of foreclosures.
The Neighborhood Stabilization Program
The lead department for everything that has to do with housing is the Department of Housing and Urban Development (HUD). They are also the lead agency in providing assistance to low-income families and new home owners seeking to buy their first home. The HUD oversees a grant program for buyers of foreclosures through the Federal Housing Authority (FHA). The assistance are mostly in the form of a housing loan guarantee or a lump sum to be applied to the down payment. The grants will not cover the entire cost of the foreclosed home but it will definitely lighten the burden.
The HUD site has a chart for grants offered and their corresponding amounts. It also outlines the requirements for availing the assistance. The most important requirement for qualifying to these programs is that the candidate must be able to obtain a loan pre-approval from a lending company or a bank.
HUD Housing Programs
The HUD also has their own inventory of foreclosures which they offer to the open market, these are homes of owners who reneged on payments to a mortgage insured by the FHA. HUD foreclosures are offered to buyers at only $100 down payment under the agency's foreclosed properties program. Homes under this program require the participation of a certified real estate broker or agent to represent the buyer in the negotiations. Should negotiations come to fruition, the HUD will further contribute towards lowering the closing costs.
Neighborhood Assistance Corporation of America
Another source of foreclosure subsidy is the Neighborhood Assistance Corporation of America or NACA. The grants if provides are exclusively for new first-time buyers or home owners. The NACA will cover the entire down payment and also the costs of closing for qualified candidates. NACA will likewise negotiate for a lower interest rates thereby saving borrowers a substantial amount of money in the long term.