A problem all too common: young couple living month-to-month, unable to save enough for a down payment. With all the monthly bills, saving a 20 percent deposit keeps ownership one step away. The United States Government has recognized this problem and is offering $200 million in annual grants to help first-time buyers into homes.

What is the American Dream Downpayment Initiative

Signed into law in 2003, the American Dream Downpayment Initiative has a purpose of increasing the homeownership rate in America. ADDI provides grants to low-income households. The grants are meant to help cover downpayment costs and closing costs. Up to $200 million is allocated annually until 2007.

How much is offered

Eligible homebuyers can receive a maximum of $10,000 or six percent of the purchase price, whichever amount is greater. The funds can be used for downpayment or closing costs.

Who is eligible

ADDI funds are distributed to first-time homebuyers. This means any individual and his/her spouse must not have owned a home for the three years prior to receiving the funds. Also, the buyers must have an income not exceeding 80 percent of the local median income. The funds can be applied to a condo, single-family home or manufactured home.

Where to go

The Housing and Urban Development Department (hud.gov) operates the funding allocation. Check their website to determine your local contact.

For more information on down-payment assistance visit www.hud.gov.