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What Are Housing Grants? Where Real Housing Help Comes From

By KPCB StaffCombined Expertise In The Low Income Housing Space For 10 Years · How we write our guides

housing grants

Housing grants are federal dollars that HUD and USDA give to states, cities, counties and nonprofits, which then use the money to help people buy, repair or rent a home. The federal government does not mail "free grant money" to individuals for housing. You get help by applying to a local program that runs on that money, and anyone who asks you to pay for a grant is probably running a scam.

Some of that local help never has to be paid back. Below is where it comes from, who it's for and how to find it in your area.

How housing grant money reaches people

USAGov says it plainly: "The government does not offer 'free money' for individuals. Federal grants are typically only for states and organizations." Its page on government loans and grants adds that federal grants "typically are not given to people for personal expenses."

So the money moves in steps. HUD sends formula grants to states and local governments. They pass some of it to nonprofits or run programs themselves. You apply to the local program, and the local agency decides whether you qualify under its rules.

Two HUD block grants pay for a lot of local housing help:

HOME Investment Partnerships ProgramCommunity Development Block Grant (CDBG)
Who HUD paysStates and local governments (called "participating jurisdictions"), often working with nonprofitsStates, larger cities and urban counties; states pass it to smaller towns and counties
Housing usesHelp buying a home, home rehab, building affordable housing, rental assistanceHousing rehab, buying property, energy work, other community projects
Can you apply to HUD?No. Apply to your city, county or state programNo. HUD says it "does not provide CDBG assistance directly to individuals"

Because each city or state designs its own program, two neighbors in different counties can find very different help. What you can get depends on where you live and how much money your local agency has left this year.

Down payment and homebuying help

If you want to buy a home, the most common "grant" is down payment or closing cost help from a state or local program. The Consumer Financial Protection Bureau says many states, local governments and nonprofits run these programs, mostly for first-time buyers with low to moderate incomes. Some also serve people who owned a home before, or people in certain jobs like teaching or firefighting.

This help often comes as a second loan on special terms instead of a gift. The CFPB notes that local nonprofit or government groups sometimes offer a second mortgage to replace a down payment. Ask any program whether its help is a grant, a forgivable loan or a loan you repay, and when.

Where to look

  • Your state housing finance agency. USAGov's page on government-backed home loans and mortgage help tells buyers to contact their state housing finance agency and links to a directory of them.
  • Your city or county housing or community development office. This is usually who runs HOME- and CDBG-funded homebuyer programs.
  • HUD's state resource pages, which list homeownership help for each state.
  • A HUD-approved housing counselor (more on this below). The CFPB says counselors can point you to local programs that help with down payments and closing costs.

Rules that often come with HOME-funded help

If your help is paid for with HOME money, federal rules set some conditions. Under 24 CFR 92.254:

  • Your household must be "low-income," which HOME defines as income at or below 80% of the area median, adjusted for family size (24 CFR 92.2). HUD can set the line higher or lower in some areas.
  • You must receive housing counseling.
  • The home must be your main residence for a set number of years (the "period of affordability"), based on how much HOME money went into it.
  • If you sell or move out before that period ends, the agency may take back all or part of the help. It can reduce that amount the longer you've lived there.

Income limits change with the area. HUD posts its FY2026 area income limits, in effect since May 1, 2026, on HUDUser. Ask the program which income table it uses, since some programs set their own. Our guide to Section 8 income limits and area median income explains how these limits work.

Federal home loans that lower the down payment

Government-backed loans have to be repaid, but they can shrink or remove the down payment:

  • FHA loans are insured by HUD "so lenders can offer lower down payments," according to USAGov. See our guide to FHA loans and how to apply.
  • VA home loans for eligible service members and veterans require no down payment, according to the CFPB.
  • USDA offers no-down-payment loans for low- to moderate-income households in eligible rural areas, also per the CFPB.

If you already have a Housing Choice Voucher, ask your housing authority whether it runs a homeownership program. HUD says some housing agencies can help voucher holders buy a home.

Home repair grants for older rural homeowners

USDA's Section 504 Home Repair program, also called Single Family Housing Repair Loans and Grants, is different from HOME and CDBG: you apply to USDA Rural Development itself, through its local office. USAGov lists it for people who live in a rural area and have a very low income.

Under the federal rules at 7 CFR part 3550, subpart C:

  • You must own the home and live in it.
  • Your household income must be at or below USDA's very low-income limit for your area.
  • You must be unable to get affordable credit elsewhere.
  • To get a grant, you must be 62 or older when you apply. Younger homeowners can still apply for a loan.
  • Grants can only pay to remove health and safety hazards or to make the home accessible for someone with a disability. Loans can cover general repairs.
  • Loans carry a 1% interest rate and a 20-year term.
  • If you sell the home less than 3 years after signing the grant agreement, you must repay the full grant.
  • There is a lifetime cap on how much grant money one household can receive.

The grant and loan caps are tied to a national loan-limit figure that USDA sets, so ask the local office for the current maximum. Applicants with savings above a set amount have to put part of it toward the repairs first. The rules set that amount at $20,000 in net family assets for elderly families and $15,000 for others.

To apply, contact the USDA Rural Development office for your state through the Rural Development state office finder. HUD's Texas page notes that the program opens and closes on a rolling basis, so ask whether your state office is taking applications now.

Other repair help

  • Weatherization and energy programs can lower bills and fix drafty homes. USAGov's home repair and energy efficiency page lists them, and our guide to energy assistance and LIHEAP explains how to apply for bill help.
  • Veterans with service-connected disabilities may qualify for VA disability housing grants to adapt a home.
  • American Indian tribal members and Alaska Natives with very low incomes can ask the Bureau of Indian Affairs about its Housing Improvement Program.
  • Many cities use CDBG or HOME money for owner-occupied rehab programs. Call your city or county housing office and ask.

Get free help from a HUD-approved housing counselor

A housing counselor is the fastest way to learn what programs exist near you. HUD-approved agencies can advise you on buying a home, renting, credit problems and avoiding foreclosure. The CFPB says they give foreclosure prevention counseling free of charge, and their other advice is "often at little or no cost to you."

You can find one three ways:

  1. Search HUD's housing counselor locator or the CFPB's Find a Housing Counselor tool by ZIP code.
  2. Call HUD at (800) 569-4287 and ask for a HUD-approved housing counselor near you.
  3. Call the HOPE Hotline at (888) 995-HOPE (4673), which the CFPB lists as open 24 hours a day, seven days a week.

Not every agency offers every service, so ask whether they do homebuyer counseling or help with repair programs before you book.

How to apply for local housing help

  1. Decide what you need: help buying, help with repairs, or help paying rent or a mortgage.
  2. Talk to a HUD-approved housing counselor about which programs fit.
  3. Contact the agency that runs the program: your state housing finance agency, your city or county housing office, your public housing authority, or your USDA Rural Development state office.
  4. Ask for the written rules. Find out the income limit for your household size, whether the help must be repaid, how long you must live in the home and whether the program has money right now.
  5. Gather proof of income for everyone in the household, ID, Social Security numbers, and your deed or purchase contract if you're a homeowner or buyer.
  6. Apply directly with the agency. Keep copies of everything you hand in and write down who you talked to.

Applying is free. Only the agency running the program decides if you qualify. Many programs have limited money each year, so if one says no or has a waitlist, ask when it will reopen and what other programs it knows about.

If you need housing right away, read steps to take if you're facing homelessness. To see other benefits you may qualify for, try our benefit finder.

How to spot a housing grant scam

USAGov warns that scammers promise government "grants" or "free money" through texts, emails, ads and websites. Its rule of thumb: "If someone asks for your personal information or money to get a grant or loan, it is probably a scam."

Warning signs include:

  • A fee to apply, to "process" a grant, or to get on a list
  • A call, text or social media message saying you've been picked for a housing grant you never applied for
  • A request for your bank account, Social Security number or a payment by gift card or wire before you get anything
  • A website or caller that says it is the government but asks you to pay

Real programs are run by state and local agencies, housing authorities, USDA and nonprofits, and you apply to them directly. If you think you've been targeted, report it to the Federal Trade Commission at ReportFraud.ftc.gov or call USAGov at 1-844-USAGOV1 (1-844-872-4681) for help.

Frequently asked questions

Can I get a free government grant to buy a house?

Not straight from the federal government. Federal grants go to states, cities and organizations. Your state or local government may use that money for down payment or closing cost help, which can be a grant, a forgivable loan or a low-cost loan. Ask your state housing finance agency or a HUD-approved housing counselor what's available where you live.

Do housing grants have to be paid back?

Some do. HOME-funded homebuyer help can be taken back if you sell or move out before the required period ends. USDA Section 504 grants must be repaid in full if you sell within 3 years. Get the repayment terms in writing before you sign.

What income do I need to qualify?

It depends on the program and your area. HOME-funded help is for households at or below 80% of area median income, while USDA's repair program uses a lower "very low-income" limit. Check your county's figures on HUDUser and ask the program for its own limit.

Is there a grant to help pay my rent or mortgage?

Rental help usually comes through your public housing authority or local programs, and HOME money can pay for some local rental assistance. If you're behind on your mortgage, a HUD-approved housing counselor can help you talk to your servicer for free.

Can I apply for housing grants on Grants.gov?

USAGov describes Grants.gov as mainly for organizations, not individuals. As a homebuyer or homeowner, you apply to your local program, not on Grants.gov.

Should I pay a company to find housing grants for me?

No. Applying for government housing help is free, and HUD-approved housing counselors can point you to local programs at little or no cost. USAGov warns that a request for money to get a grant is probably a scam.

Sources

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