Housing Programs and Loans

• Author: Bennie West
• Posted: 2024-05-08

With 30-year mortgage rates above 7%, the demand for housing has been low. Since July 2023, mortgage rates have been at this level, and home buying has slowed largely because of it.

Throughout this year, mortgage rates have been an issue. Many potential home buyers cannot afford these higher rates. This continues a housing trend that became apparent in 2022.

Mortgage rates are one issue when trying to buy a home. Read more to find out about housing programs and loans that can help meet this challenge and others.
 

The Current Housing Market

While industry experts do not expect the housing market to crash, the combination of rising house prices and mortgage rates has made it difficult for many to buy a home.

Over the past five years, housing prices have increased. According to the National Association of Realtors, the national median sale price of a home is over $400,000 and close to record levels. Even while interest rates have gone up, home values have maintained themselves or increased.

The lack of housing supply and the costs of materials help explain this situation. However, existing home sales saw a major decline in July and have largely dropped this year. Prospective home buyers face higher housing costs and interest rates at the same time.

This housing scenario creates a perplexing situation for home buyers. To help address this situation, government programs are needed more than ever.
 

Housing Programs

Fortunately, there are several federal housing programs to help people with this challenging housing market. The federal government provides the majority of support for obtaining affordable housing and is the main resource for those looking to buy a home.

The Home Investment Partnerships Program (HOME) is top among those programs. HOME provides grants to states and local governments to develop communities through a variety of uses. For example, this program is used to build affordable homes and provides rental assistance to low-income households.

The HOME program is known for its flexibility, allowing states and cities to use funds for grants, loans, and security deposits. Hence, this program works on a macro level to create affordable housing and on a micro level to provide direct support to those who are seeking to buy or rent a home.

Similarly, the Community Development Block Grant (CDBG) targets a range of community development activities, ranging from housing rehabilitation to homeowner assistance.

Both HOME and CDBG are run through the Department of Housing and Urban Development (HUD). HUD also funds direct support programs such as the Housing Choice Voucher Program that provides vouchers to enable people to live in single-family homes.

As part of the U.S. The Department of Agriculture, Rural Development offers a program to help households buy property in rural areas. The Single Family Housing Programs provide an opportunity to build, buy, or repair a house in the rural United States. Funds come in the form of grants and loans.
 

Government-backed Loan Programs

Government-backed loans and mortgage assistance programs have been a long-standing measure of support for would-be homeowners. Turning to these resources is vital today more than ever.

Federal Housing Administration (FHA) loans help first-time home buyers with down payments, closing costs, and low interest rates. The FHA also provides financial support for seniors (age 62 and above) and with energy efficiency.

The federal government also supports specific groups of people, such as Native Americans. The Indian Home Loan Guarantee Program provides home mortgages to those who are American Indians or Alaska Native families. These loans are directed at single-family housing and fixed interest rates.

Moreover, The Department of Veteran Affairs (VA) offers loan programs to veterans and active duty service members. VA Home Loans are provided by private lenders but the VA guarantees at least a portion of the loan. This department also has home repair and building elements.

The federal government also has the Single Family Housing Direct Loans program. This loan program offers house payment assistance for low-income families in rural areas. Loans can also be used for renovating and building a home.

The struggle to buy a home is not easy, but resources are available to help. To learn more about housing programs and loans, visit YourHousingSupport.