By Laura Watson

Most people know that it is possible for a nonprofit organization to purchase real estate with the help of government grants but did you know real estate investors can as well. Yes,  real estate investors and agents or any individual can apply for a real estate grant if they know where and how to do so.

There are a number of different grants that may be available for real estate purchases, so it is important to do your research before deciding which one is right for you.  The grant process can be time consuming, but it may be worth the effort in order to get your hands on some of this free money.

It is important to keep in mind that there can be a lot of regulations surrounding the use of grant money, so you’ll want to make sure your plans are in keeping with those regulations or else risk losing any funding you receive.  Grants for real estate purchases can come from many different sources, including local and federal governments as well as private corporations.

Grants to Purchase Real Estate

First, research all available federal and state programs that provide funding for property acquisition. Grants can pay for a variety of expenses related to the purchase, such as the down payment, closing costs, and renovations.

There are also numerous private foundations that offer grants for real estate purchases as well.  Be sure to research these organizations thoroughly and apply for any grants that match your organization’s needs.

Finally, remember that it is important to budget carefully when purchasing property.  Make sure that you have enough money to cover all of the associated costs, including property taxes and insurance.  By planning ahead and taking advantage of available grants, you can make owning real estate a reality for your nonprofit organization.

Types of grants for real estate:

• Federal grants from the Department of Housing and Urban Development (HUD): State and local nonprofit organizations that provide housing and community development assistance for low- and moderate-income individuals.
• Grants from the Department of Agriculture Rural Development: Nonprofit organizations in rural areas in developing water and waste disposal systems, sewage treatment facilities, and affordable housing.
• The Neighborhood Reinvestment Corporation: Offers a variety of grants for both home buyers and real estate developers.
• State Housing Finance Agencies: Many states have their own housing finance agencies that offer grants and other forms of assistance for home buyers and developers.
• The Community Development Financial Institutions Fund: This fund provides assistance to finance affordable housing, economic development, and other community-based projects.
• Federal Grants from the Federal Housing Authority (FHA): This government agency offers homeownership grants through its FHA loan program
• Grants for Real Estate Developers: The National Community Stabilization Trust is a national network of organizations that offers various grants for those involved in the acquisition, rehabilitation, resale or rental of real estate.

Benefits:

• Grants of up to $1 million are available for nonprofit organizations that provide affordable housing.
• Limited grants of between $500,000 and $5 million are available for commercial real estate projects involving the development of self-sustaining neighborhoods or areas with access to commercial services. Funding is provided by state Housing Finance Agencies (HFA).
• The Neighborhood Reinvestment Corporation offers grants to individuals who are involved in the acquisition or rehabilitation of real estate for resale. Up to $75,000 per project is available.
• Grants of between $25,000 and $200,000 are available from private foundations for buying property that will be used as homes for low income families or for developing affordable housing.
• The Community Development Financial Institutions Fund offers Community Development Grants of up to $500,000 for nonprofit organizations that work to revitalize low-income communities.

What’s needed?

The first step in obtaining a grant for real estate is to identify the specific grant you are interested in and then determine whether or not you are eligible.

Many of the government grants require that the nonprofit provide services to low-income individuals and families, while some of the private foundations give money to organizations in specific geographic areas. Other grants are only available for certain types of projects, such as commercial real estate or home ownership for lower income families. Make sure you read the guidelines carefully before applying.

In order to apply for a grant, your organization will need to complete an application form and provide detailed information about the proposed project. This may include a budget, architectural drawings, and a description of how the project will benefit the community.

The process of obtaining a grant can be time consuming, so it is important to start the application process early. Be prepared to submit additional information as requested by the grantor and be patient, as the review process can take several months.

So, if you’re looking to purchase some property soon, it may be worth your while to look into some of these grants!

Bottom line:

There are a variety of grants available for those looking to purchase real estate. Eligibility requirements and the amount of the grant vary, so be sure to read the guidelines carefully. The application process can be time consuming, but it may be worth your while to pursue a grant for your next real estate project!