Incentives for First-Time Homebuyers
- An incentive for first-time homebuyers is meant to help with costs associated with home sale, including the buying itself and legal or closing costs. Closing costs are expenses the buyer must pay to close the deal, such as loan and local filing fees. The overall aim is to make home ownership a reality for a person who does not have all of the upfront money needed and sometimes to encourage a home purchase in a struggling neighborhood.
- Assistance for a first-time homebuyer comes in a variety of forms. Low-interest loans or grants are available from local agencies to offset closing costs. A new homebuyer who wants to rehabilitate an existing home that has major defects may be eligible for a cash incentive relating to the repairs and some grants are offered for the purchase of a home in a targeted area. A first-time homebuyer with a disability may be able to receive an incentive for making renovations to the home he is buying to accommodate his condition.
- Some types of aid are limited to certain groups of people, such as single parents or persons with disabilities, while other incentives are for specific housing types or regions. Income may be part of the criteria to obtain an incentive, as some programs are geared toward low-income buyers. First-time homebuyer incentives are normally geared toward using a home as a primary residence, so some programs exclude homes with more than one unit.
- A grant usually does not have to be repaid but some housing agencies have rules about grants and home ownership. A first-time homebuyer sometimes has to live in the home for a set number of years, and if she moves out early, she is required to pay back a percentage of the grant money she received.
A first-time homebuyer is not necessarily a person who never owned a house. Some housing agencies consider a buyer a "first time" purchaser if he has not owned a home for a specific number of years preceding his application.