Federal Grants for Closing Costs

by James Rada, Jr. ; Updated July 27, 2017
The federal government makes buying a home more affordable with grants for closing costs.

Closing costs on a mortgage loan can be prohibitive depending on your financial situation and the state you live in. The federal government has established programs to help home and property buyers with closing costs if qualifying conditions are met. Sometimes these grant programs will pay for costs associated with buying property.

HOME Investment Partnerships Program

The U.S. Department of Housing and Urban Development provides formula grants to increase the supply of affordable housing through the HOME Investment Partnerships Program. The program will provide grants for home rehabilitation, rental assistance and home-buying assistance, including paying for closing costs. Closing costs would be paid for under the American Dream Downpayment Initiative. The home needs to be located in a community of 150,000 or less, and the homeowner must qualify as low-income.

HOME Investment Partnerships Program 451 7th Street, SW, Room 7164 Washington, DC 20410 202-402-7354 hud.gov/homeprogram/

Rural Housing Site Loans and Self-Help Housing Land Development Loans

The U.S. Department of Agriculture provides grants and loans to help organizations that are trying to obtain building sites for housing in rural areas. The houses to be built must be for low and very low income families. The money can be used for site purchase and development including the closing costs for the property. The grants can’t be used to refinance debt or pay commissions to agents or brokers.

Director, Single Family Housing Processing Division, Rural Housing Service U.S. Department of Agriculture Washington, DC 20250 202-720-1474 rurdev.usda.gov

Specially Adapted Housing for Disabled Veterans

The U.S. Department of Veterans Affairs provides grants to disabled veterans to purchase a specially adapted house or to make improvements to existing housing. The program provides half of the cost of an adapted house up to $50,000. The cost is calculated to include not only the cost of the property but the costs for mortgage closing. The grant can also be used to build an adapted home, remodel an existing home or reduce the mortgage of a home that is already owned by the veteran. The veteran must have a service-connected disability as defined by the Department of Veterans Affairs to qualify for the program.

Department of Veterans Affairs Washington, DC 20420 202-461-9500. homeloans.va.gov

About the Author

James Rada, Jr. was a newspaper reporter for eight years and earned 23 awards from the Maryland Delaware D.C. Press Association, Associated Press, Society of Professional Journalists, Maryland State Teachers’ Association and CNHI. He also worked for 12 years as a marketing communications writer, earning a Print Copywriter of the Year Award from the Utah Ad Federation. He holds a Bachelor of Arts in communications.

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