Winter 2004-04 New federal program to provide down payment grants

Number 54
Winter 2004

New federal program to provide down payment grants

President George W. Bush signed into law the American Dream Downpayment Act on December 16, 2003.

A new program that will provide government grants to help home buyers with down payments and closing costs will be established thereunder commencing in the Spring of 2004. The law appropriates the sum of $200,000,000 per year through 2006 to implement the initiative, which will be administered by HUD-the Department of Housing and Urban Development.

Specifics

Grant recipients must be first-time home buyers with annual incomes that do not exceed 80% of the media income of the area where the property is located.

Each grant will be for a sum equal to 6% of the purchase price of the home, or $10,000, whichever is greater. It can be used for down payment, pay closing costs, or other fees associated with the purchase of a home.

In a ceremony to sign the law, President Bush mentioned that “one of the biggest hurdles to home ownership is getting money for a down payment. This administration has recognized that, and so today I’m honored to be here to sign a law that will help may low-income buyers to overcome that hurdle, and to achieve an important part of the American Dream.” He continued saying that “many people are able to afford a monthly mortgage payment, but are unable to make the down payment. So this legislation will authorize $200 million p year in down payment assistance to at least 40,000 low-income families. These funds will help American families achieve their goals, and at the same time, strengthen our communities.”

© 2004 Goldman Antonetti