The grant cannot have been created solely for the client’s transaction. It must be available for other recipients, and therefore recognized and generally accepted.

Grants may be applied towards:

– Down payment

– Closing costs

Some grant programs will place a lien on title and may not subordinate on a refinance transaction. For down payment assistance programs that place a lien on title.

If the grant is from an employer as an established employer assistance program.

The following types of grants are not allowed as an eligible source of funds to be used toward down payments and/or closing costs:

– Grants that require repayment

– Grants that require the lender to use the down payment assistance provider’s  first lien loan

– Grants that require the lender to be a participating lender in order to use the grant funds

– Programs that convert or ‘wash’ seller concessions into down payment assistance

– Below Market Rate Programs

– PELL grants

Grants are only allowed on primary residences.