What Is the Chase Homebuyer Grant?

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The Chase Homebuyer Grant provides up to $5,000 in assistance toward the purchase of a primary residence in low- to moderate-income areas designated by the U.S. government. Homebuyers may be eligible for an additional $500 grant, bringing the total assistance to $5,500.

Definition and Example of Chase Homebuyer Grant

The Chase Homebuyer Grant helps eligible homebuyers purchase a primary residence by providing up to $5,000 toward closing costs and down payment. To be eligible, homebuyers are required to purchase a home in certain geographic locations. Additionally, the grant can only be applied to certain loan types.

How the Chase Homebuyer Grant Works

Chase offers its Homebuyer Grant as part of its $30 billion commitment to advancing racial equity. The Chase Homebuyer Grant allows homebuyers in areas with low-homeownership rates to qualify for up to $5,000 to help cover closing costs and down payment on a primary residence. The home must be located in one of 6,700 minority communities.

The grant is first applied to mortgage discount points, which lowers your interest rate, monthly payment, and the overall interest paid on the mortgage over time. Any remaining grant funds are applied to fees, both Chase and non-Chase fees, and finally, your down payment. If you already have a down payment, the remaining amount can be used toward closing costs.

Qualifying Mortgages

Mortgages that qualify for the grant include:

  • Chase DreaMaker Mortgage: This is a first-time homebuyer mortgage designed for low- to moderate-income borrowers.
  • Standard Agency: A low-down payment option for first-time buyers that follows Fannie Mae guidelines.
  • FHA loans: These are federally insured loans for borrowers with low credit scores, low or moderate income, and limited savings.
  • VA loans: These are mortgage loans offered to active-duty and veteran military service members and some surviving spouses.

Buyers purchasing a home with the income-based DreaMaker Mortgage can qualify for an additional $500 benefit by enrolling in a qualifying homebuyer course—a requirement for first-time homebuyers applying for a DreaMaker mortgage.

The grant may be considered miscellaneous income for tax purposes and may be reported on a 1099-MISC form. A tax professional can help you understand the potential impact to your taxes.

Alternatives to Chase Homebuyer Grant

There are many first-time homebuyer assistance programs available if you're looking for a home in a location that doesn't qualify for this one, or if you prefer another lender. Here a few to consider.

HomePath Ready Buyer

HomePath Ready is a grant program offered by Fannie Mae for homebuyers purchasing a HomePath property. The program provides assistance with closing costs up to 3% of the loan amount. Homebuyers are required to take an online homebuyer education course to participate.

HomePath properties are foreclosed homes owned by Fannie Mae. Properties are available throughout the country (and searchable via an online database), and may be condos, townhomes, or single-family homes.

National Homebuyers Fund

The National Homebuyers Fund grant covers down payment or closing costs up to 5% of the loan amount. You can use the grant toward the purchase or sale of a primary residence financed with an FHA, a VA, USDA, or conventional mortgage. You have to use a participating lender to qualify.

State Down-Payment Assistance Programs

Many states have down-payment assistance programs available as grants or low- or no-down-payment loans. Programs and requirements vary by state. Some may have income limits, minimum credit score, and maximum debt-to-income ratio requirements. Check with your lender or your state housing authority to learn more about the options available in your state.

Key Takeaways

  • Homebuyers purchasing a primary residence in a minority neighborhood may qualify for a grant up to $5,000.
  • The grant can be used to pay down interest, cover closing costs, fees or down payment.
  • An additional $500 is available for DreaMaker loans after completing a homebuyer education course.
  • There are alternatives for first-time homebuyers who don't qualify or prefer to work with another lender.

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