First time home buyer grant
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A first time home buyer grant is a grant specifically for/targeted at those buying their first home — perhaps a starter home. Like other grants, the first time buyer does not hold an obligation to repay the grant. In this respect, it differs from a loan and does not incur any debt or interest. Grants can be given out by foundations and governments. Grants to individuals can be either scholarships or donations.
First time home buyer grants are typically awarded based on a few criteria, primarily financial need and income qualifications.[citation needed]
Many states have initiated grant programs to help lower income residents with the purchase of their first home. The United States Department of Housing and Urban Development (HUD) also provides grants to first time home buyers.[1]
Funding for various state first time home buyer grants is nearly always available.[citation needed] In fiscal year 2006, only two states exhausted their budgets for first time home buyer grants.[citation needed]
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[edit] Australia
A similar program was introduced in Australia from the 1 July 2000, where first time home buyers can receive a $7,000 once off payment to offset the cost of GST. While the program is offered nationwide, the scheme is funded by the states and territories and subject to respective legislation.[2]
[edit] First Home Owners Grant Boost
In October 2008, the Australian government announced a boost to the scheme to alleviate the Global Financial Crisis, in order to stimulate the housing industry and increase home affordability. The stimulus consisted of an extra $14000 available to first home owners buying or building a new home, as well as an extra $7000 made available for extablished homes. The scheme continued from 14 October 2008 through to 30 September 2009.[3]
On 1 October 2009 to the 31 December 2009, $7000 will be provided only to home owners buying new homes or building a new home on top of the regular $7000 once off payment. $3500 will be given to home owners buying established homes.[3]
On January 2010, the scheme will default to $7000 for all first home owners.
| Type | Scheme | Eligible Dates | Benefit |
|---|---|---|---|
| Established Homes | First Home Owner Grant | 1 July 2000 - present | $7000 |
| New Homes / Construction | First Home Owner Grant | 1 July 2000 - present | $7000 |
| Established Homes | First Home Owner Boost | 13 Oct 2008 - 30 Sept 2009 | $7000 |
| New Homes / Construction | First Home Owner Boost | 13 Oct 2008 - 30 Sept 2009 | $14000 |
| Established Homes | First Home Owner Boost | 1 Oct 2009 - 31 Dec 2010 | $3500 |
| New Homes / Construction | First Home Owner Boost | 1 Oct 2009 - 31 Dec 2010 | $7000 |
[edit] Problems with First Time Home Buyer grants
Because a first time home buyer grant usually pushes up the amount that such a buyer can borrow from a financial institution by more than the value of the grant, in competitive housing markets where a majority of competing buyers will also have access to the grant, the end result is that lower-end houses increase in price also by more than the value of the grant, and first home buyers tend to accumulate more debt than if the grant had not been available.[citation needed]
