Most of us seem to be having confusions about various government grant programs that are available for general public. While there are hundreds and thousands of grant programs available out there, aimed towards various target audiences, yet the major ones can be divided into 4 categories namely:
- Housing Grants
- Small Business Grants
- Education Grants
- Medical Grants
- Miscellaneous Programs
So I summed up my knowledge of the major grant categories and their sub-categories to define and clarify the purpose, scope, functionality, general eligibility and framework of each of these programs in a manner, that a common man can easily understand them.
Housing Grants
Homebuyer Grant / Downpayment Assistance Program
A homebuyer grant usually comes in the form of a down payment or closing costs assistance, which means that the homebuyer has to apply for a government backed mortgage program that is prevailent in his/her state (which usually is a below market & fixed interest rate, easy terms and conditions and government insured mortgage program i.e. government guarantees the monthly mortgage payments on behalf of homebuyer in case of his/her unwilling unemployment or other financial problems).
After the applicant is found eligible for the Homebuyer Program, he/she automatically qualifies for a downpayment assistance which can be given with slight condition of completing a Free Homebuyer Education class / course. This downpayment assistance can be given in following forms, depending upon each state’s Housning Authority’s policies:
- A fixed non-repayable amount e.g. $5000 or $10,000
- A percentage e.g. 5% of the total house cost
- A defered payment, zero interest 2nd mortgage
- Elimination of downpayment requirement
Home Renovation / Repair / Rehabilitation Program
A home improvement / repair / renovation grant program usually comes in the form of a grant which is mixed with a loan in various ways. A person looking for home improvement assistance has to apply for a state sponsored, home improvement / repair loan program. A portion of interest payments is forgiven or bore by the government which results in reduction of interest rates on the loan, as compared to a conventional bank loan.
In some states, a home improvement grant comes in the form of a zero-interest loan program, which means all the interest is forgiven / paid by the government on behalf of the homeowner looking for repairs. Where as, in other states, a home improvement grant comes with a portion of the funding as a non-repayable grant, and the other portion of it is repayable.
Yet there are few states and counties, where a home-improvement grant is purely a grant, and doesn’t require to be paid back. But again, there can be various limitations / conditions attatched to it. There are very few states, who do not have a home improvement grant or loan program, in such states, a homeowner has no option but to acquire a conventional bank loan for making home improvements.
Mortgage Payments Assistance / Foreclosure Prevention
A mortgage payments or mortgage lowering prgram is usually refered to as a “Loan Modification Program.” A Loan Modification is the retooling of an existing loan made by a lender in response to a borrower’s long-term inability to repay the loan based upon the original terms and conditions.
Loan Modifications typically involve a reduction in the interest rate and/or principal balance of the loan, an extension of the length of term of the loan, a different type of loan or any combination of the three. A lender will consider modifying a loan because the cost of doing so is typically less than the cost of default
At times, certain cities, counties or states as well as some other non-profit organizations, having received Community Development Block Grant or some other program funds, may also be able to provide a one time mortgage payment assistance for eligible applicants who are delinquent on their mortgage. But this type of assistance is not very common.
Rent Payment Assistance Programs
Rental assistance programs provide rental vouchers to assist with rental payments, rental properties, and/or assistance with security deposits. Normally, each state administers its programs and services through a network of organizations, and does not fund individuals directly. MYGRANTS can help you identify the list of participating foundations and agencies in your area – who can be contacted to assist you with rent payment assistance.
There are usually two forms of rental assistance programs:
1. Each state maintains its Public Housing Units, that are government subsidized apartments, where low-income citiznes / families can apply for living, at a subsidized or low monthly cost, and under certain conditions, this low cost can also be eliminated alltogether.
2. In second case, the applicants are put on a waiting list, and once their turn comes, they have the freedom to choose their own property / home / appartment they want to rent (provided the home meets certain government limitations / regulations), and then the government assists the renters get the apartment / home at a below market rent cost. In certain states, this Rental Assistance Program also gives the renters, the opportunity of either Rent-to-Own program or Homebuyer Assistance Programs.
Home Weatherization Assistance
A home weatherization program is sort of a mini house repair program, which allows only for specific repairs like heating / pipelines / electric cables / lead paint etc. The sole aim of a weatherization program is to make a home energy effecient and reduce the monthly home energy bills.
Home Energy Assistance Program (HEAP)
Each state provides bills payment help to its income-eligble citizens and families, to assist with their fuel needs, heating and cooling needs. This program usually helps applicants pay their electric energy, heating or cooling and / or other utility bills.
Rural Homebuyer and Home Repair / Rehab Programs
The Rural Housing Service provides a number of homeownership opportunities to rural Americans, as well as programs for home renovation and repair. RHS also makes financing available to elderly, disabled, or low-income rural residents of multi-unit housing buildings to ensure they are able to make rent payments.
It is however important to note that while rural housing programs work more or less in the same way as that of urban housing programs, they may offer additional leverage by providing a portion of funds as a complete or partial non-repayable grant to certain income and/or age eligible homebuyers and homeowners.
Housing Assistance for Elderly and Disabled
The Public Housing Program is one of several Federal Rent Assistance Programs established to provide decent and safe rental housing for eligible low-income families, the elderly, and persons with disabilities. Public housing comes in all sizes and types, from scattered single-family houses to high-rise apartments for elderly families.
The U.S. Department of Housing and Urban Development (HUD) administers Federal aid to local Housing Agencies (HAs) that manage the housing for low-income residents at rents they can afford. HUD furnishes technical and professional assistance in planning, developing and managing these developments.
There are approximately 1.3 million households living in public housing units managed by some 3,300 HAs, which, within Federal guidelines, set eligibility standards and determine rent payments.
Veterans Housing Grant / Assistance Programs
Veterans or service members who have specific service-connected disabilities may be entitled to a grant from the Department of Veterans Affairs (VA) for the purpose of constructing an adapted home or modifying an existing home to meet their adaptive needs. The goal of the Specially Adapted Housing (SAH) Grant Program is to provide a barrier-free living environment that affords the veterans or servive members a level of independent living he or she may not normally enjoy.
There are two types of grants administered by VA, which are available to assist severely disabled veterans or service members in adapting housing to their special needs.
The Specially Adapted Housing Grant is available to severely disabled veterans or service members who are entitled to a home especially adapted for their needs due to loss of mobility. Under this entitlement, a temporary grant (TRA) may be available to veterans who are/will be temporarily residing in a home owned by a family member.
The Special Housing Adaptations Grant is available to veterans or service members who are entitled to home adaptations due to blindness in both eyes with 5/200 visual acuity or less, or includes the anatomical loss or loss of use of both hands. Under this entitlement, a temporary grant (TRA) may be available to veterans who are/will be temporarily residing in a home owned by a family member.
Affordable Housing Developers’ Assistance Programs
Each state’s Housing Finance Agency (HFA) offer financing to for-profit and not-for-profit developers to encourage the construction and preservation of affordable housing in communities across the state. In some states, mortgaege insurance is also offered to lenders of low-income & multifamily housing.
Business Grants and Financing Programs
Small Business Innovation and Research (SBIR) Grant Program
This is probably the only pure grant program offered at federal and state levels, meant for for-profit businesses. However, this non-repayable grant program si offered only to businesses, that are interested to carry out researches and projects, resulting in innovation and enhancement of technology.
Foundation Grants or Grants for Non-Profit Organizations
Foundation grant programs are administered on federal, state, county and city level by the government as well as other private foundations. Foundation grant programs are only meant for Non-Profit organizations and for a very few For-Profit organizations as well, that are carrying out a public / general welfare project.
These grants can be given to any non-profit organization working in social, defence, educational, research, medical, music, arts, religious or any other sector of general public interest / welfare.
These grants are non-repayable however, they are striclty monitored by the grantors to evaluate the performance of the grantee organization, and to ensure the right and legal use of funds.
Small Business Microfinancing Programs
For all other businesses, that are already operating or looking to start, there are government backed and private foundations’ backed Micro Loan and Financing programs, that are very viable and affordable as compared to conventional bank loans.
These Small Business Financing programs are also best options for minorities, women, disabled and other people who do not have strong enough credit score to be able to obtain bank loans.
Some Government Backed Business Loan programs under certain conditions are also converted to defered payments, zero-interest loans, thus saving a siginificant amount of money for the borrower.
Government also provides tonnes of free facilities, like free management training, free marketing and other business informational resources that can significantly help the small business owners guide their businesses on a highly profitable track.
Financing Available:
- Upto $35,000 for business start-up
- Upto $50,000 for business expansion
Government Backed Large Business Loans
SBA offers 2 very popular government guaranteed / backed business financing programs, namely SBA-7A and SBA-504 programs. These programs offer financing upto very high limits for large business projects. These programs are usually used for acquisition of land / building / machinery / equipment and for working capital and other business needs. These programs also require collateral against the financing to secure the loan funds.
Financing Available:
- SBA 7A Offers upto $700,000
- SBA 504 Offers upto $2,000,000
Education Grants and Scholarship Programs
Federal Student Aid (FAFSA)
These grants are free to apply for, and are commonly refered to as Federal Pell Program or FAFSA. These programs provide financing to continue your education based on various factors including financial situation, educational standing, grades / performance etc. You can simply apply for FAFSA by logging on to www.fafsa.ed.gov
Other Educational Grants / Scholarship Programs
Beside Federal Educational Grant Program (FAFSA), there are hundreds of other non-repayable educational grants and scholarship programs that are administered by each state, educational institutions, private foundations and certain corporations. One can easily qualify for such programs, as they are mostly given on the basis of financial needs and not solely on the basis of educational performance.
Medical Grant Programs
Disability Insurance Program
Disability Insurance Programs have the “basic objectives of providing for the material needs of individuals and families, protecting aged and disabled persons against the expenses of illnesses that could otherwise exhaust their savings, keeping families together, and giving children the opportunity to grow up in health and security.”
Cash Disability Benefits
Monthly cash benefits for qualifying disabled workers; needy, blind or disabled individuals; disabled widow(er), or disabled surviving divorced spouse; disabled son or daughter. Also offers vocational rehabilitation assistance.
Medicare Program
Medicare is a Health Insurance Program for people 65 years of age and older, some disabled people under 65 years of age, and people with End-Stage Renal Disease (permanent kidney failure treated with dialysis or a transplant).
Medicaid Program
Medicaid provides medical care to the poor, to children and to pregnant women living under the federal poverty level. It is funded jointly by the states and the federal government.
Medicaid was established in 1965, at the same time as Medicare, under Title XIX of the Social Security Act. It was designed to assist low-income families in providing health care for themselves and their children. It also covers certain individuals who fall below the federal poverty level. It covers hospital and doctor’s visits, prenatal care, emergency room visits, drugs and other treatments.
Other people who are eligible for Medicaid include low-income children under age 6, low-income pregnant women, Supplemental Security Income recipients, adopted or foster children, specially protected groups, children under age 19 whose family income is below federal poverty level, some Medicare beneficiaries and other groups, as determined by each state. Most families who receive welfare probably have a social worker assigned to them, and this person will usually advise a family on its Medicaid eligibility. Many doctors will also be able to inform their patients about Medicaid.
Veterans Health Benefits and Services
The VA provides a broad spectrum of medical, surgical, and rehabilitative care to its customers. Our goal is to share information about these benefits and services to make it as easy as possible for you to receive the care you need.
Childcare Financial Assistance
Government offers financial assistance for low income families who have trouble paying for childcare. If you meet certain income guidelines set forth by your state, you may also qualify for childcare grant program.
Miscellaneous Programs
Temporary Assistance for Needy Families / Cash Assistance (TANF)
Temporary Assistance for Needy Families ( TANF ) is part of the American welfare system, and is designed to get funds into the hands of poor families with children in order to assist them with rent, food, and medical care.
This type of assistance is only provided to very low-income families and is a temporary assistance, with its sole purpose to help the citizens under financial hardships, while constantly trying to help them stand on their feet once again and become financially self-sufficient.
Debt Reduction Assistance Program
Although there are no grants available to help pay off your credit card or other debt like personal loans, doctor bills, lawyer bills, student loans etc, yet there’s a very popular program called a “Debt Relief or Debt Reduction Assistance Program” that is administered by various non-profit organizations that are catering many states.
Under this program, the applicant’s debt is negotiated by the debt reduction foundation with the borrowers’ creditors to get the debt amount reduced by 40% to 60% thus making it easily affordable for the borrower to pay off his/her debt and become debt free, while saving thousands of dollars which would otherwise have been paid, in settlement of debt.
