You heard me right. There are organizations out there that will GIVE you money you don't have to pay back to help first time home buyers. For most first timers, saving up for a down payment is the biggest obstacle to buying a home. Fortunately, there are grants for qualifying buyers. 

TheBalance.com, a financial advice website, has an in-depth article about home buyer grants. According to TheBalance: "First-time home buyer grants are designed to offset some of the purchasing costs for new buyers. They typically cover part of your down payment, closing costs, or sometimes the total purchase price of the home. They do not require repayment, as long as you live in your home for the required amount of time."

Many of these grants are federally funded, although the U.S. government doesn't offer the money directly. Instead, these funds are given by the feds to state and local municipalities.

Start your search by looking at local programs. Check with your lender or your local REALTOR® to know the list of housing grants and programs available in your state/area, and know the best program for which you are eligible and might apply to your situation.

In the Hudson Valley, the Hudson Valley Home Connection has a comprehensive guide to programs buyers can look into.  New York State and New Jersey both have statewide grant programs, and New York City has one all its own. 

The Good Neighbor Next Door Sales Program covers 50% of a home’s list price and is designed specifically for public servants. Only law enforcement officers, firefighters, emergency medical technicians, and teachers of grades pre-K through 12 are eligible to apply, and only certain properties qualify for the program. If you fall into one of these categories and are interested in leveraging the grant, you’ll need to check for HUD-approved homes in your area.

HomePath, a Fannie Mae program provides up to 3% of the cost of a home to help with the down payment. You have to take the online HomePath Ready Buyer Course, which costs $75 and runs four to six hours. The fee is reimbursable once you purchase an eligible Home Ready house.

This is a grant that covers part or all of your down payment or closing costs, up to 5% of the total loan amount. It’s available in all 50 states and does not need to be repaid. It’s sometimes provided as a 0%-interest rate second mortgage, and can be used for both the purchasing and refinancing of a primary residence.

MCCs are federal tax credits that help first-time home buyers offset the costs of taking out a mortgage. They allow you to reduce your total tax liability by up to $2,000, depending on your loan amount. According to the Federal Deposit Insurance Corporation (FDIC), MCCs can even help you more easily qualify for a mortgage loan by reducing your expected monthly payment. Though you apply for an MCC in the year you purchase the home, you can enjoy the credit for the entire life of the loan, as long as the property remains your primary residence.

In order to be eligible for any of the above first-time home buyer grants, you’ll need to be able to qualify for a mortgage loan first. You may want to get pre-qualified with a mortgage lender to ensure you can meet this requirement before moving forward with any grant application.

Federally funded grants will also require you to complete a HUD-approved housing counseling class. See HUD.gov to find housing counselors in your area. In order to be eligible for any of the above first-time home-buyer grants, you’ll need to be able to qualify for a mortgage loan first. You may want to get pre-qualified with a mortgage lender to ensure you can meet this requirement before moving forward with any grant application.

Federally funded grants will also require you to complete a HUD-approved housing counseling class. See HUD.gov to find housing counselors in your area.

So, yes, it's a bit of work. But FREE money to help you buy your first house? Let's rock and roll!