Search your state for financial assistance for housing Many times, federal grants for housing assistance are handed out to the individual states to disburse. The best way to find out what's available is to ask your state's Housing and Urban Development (HUD) office.

I recommend:  Contact your state's housing counseling agency. These agencies can work with you and give you options for housing assistance programs. Before you go, search programs yourself by looking at local homebuying programs so you can speak to your counselor about these options.

See if you qualify for grants for affordable housing If you qualify, a low income housing grant is a great option for homebuyers. Grants are free money that you won't have to repay available through the state and federal government.

I recommend:  Check out FirstTimeHomeBuyers.com which outlines what states have grants available and which states don't. Even if your state doesn't offer grants, you may be eligible for a grant through the federal government. Search housing grants available at Grants.gov.

Get affordable housing credit to save money Even if you don't qualify for a grant, there are still other options to help you save money on your house. Local and federal agencies have mortgage discount and credit programs for which you may be eligible.

I recommend:  The mortgage credit certificate reduces the amount of money you pay in federal taxes, so you will have more money to spend on your home. If you are considering a home that needs repairs, look into HUD's 203(k) rehab program which will loan you mortgage and repair money. If you aren't quite ready to own a home, see if you quality for Section 8 affordable housing assistance, which will help you pay rent.