Especially in a turbulent housing market, where default and foreclosure are rather commonplace, some borrowers seek assistance. For mortgage borrowers that are facing default on their mortgage or foreclosure on their home, there are some home mortgage assistance grants that are available on a federal government level. Each grant has its own eligibility requirements and amounts of assistance can vary greatly, so be sure to consult with the federal government, local entities and nonprofit organizations that oversee these programs for the details on how to qualify for and how to apply for the grant.

Definition of a Grant

The most popular form of a grant and the type of grant that most consumers are familiar with is an educational grant to cover college education tuition and expenses. Educational grants lend the meaning to the term "grant" that consumers tend to think that it implies it is free money that does not have to be paid back (as is the case with the term loan, where people pretty much know that they have to pay the money back to the lender). When it comes to federal mortgage grants, it depends on the grant as to whether or not you have to repay the money given to you. Some grants do not have to be paid back while other grants are meant to temporarily assist homeowners until they can get back on their feet.

Where Grants Come From

Federal grants for mortgage defaults come from the U.S. government, but the grants may be overseen or distributed to recipients through various programs or organizations. Some of the top agencies or segments of the federal government that issue mortgage default grants include the U.S. Housing and Urban Development (HUD), which oversees federal mortgage grants that fall under the jurisdiction of the American Recovery and Reinvestment Act (ARRA).

Grant Distribution

Even though the grant money stems from the federal government, local government, municipalities or non-profit organizations may distribute the grant funds these organizations may also be directly involved in the grant application, approval and denial process. For example, of the $13.61 billion allocated from ARRA, a portion of these funds were distributed to states, counties, municipalities and non-profit organizations to assist mortgage borrowers currently in default or heading for default on their mortgage.