Grants and Loans
Years
ago when I first got into the real estate business, I worked
for a real estate loan broker. We had a project in the office
that consisted of a ranch near Bakersfield, California. The old
couple were facing foreclosure and were desperate to refinance
the farm and save their life work. Through a lot of hard work
we had found a company in in Kansas City that was writing a thing
called a 'standby commitment'. We talked to the farm owners and
and they agreed that if they could get the letter from this Midwestern
institution, that they could arrange for their local bank to
fund the loan.
The
Kansas City representative flew in and the folks from Bakersfield
came to the office and we all sat around in the conference room.
I was learning the business so I got to sit in as well. The farmers
agreed to pay $4,000 for a commitment letter from the swift dude
from K.C. and handed the check to my boss ... who hesitated and
said... no... no... no... give it to him... the guy from K.C...
They proceeded to give this guy the check and that's the last
we ever heard from him. Two weeks later the F.B.I. called and
came over to the office telling us that they were looking for
him. What does this have to do with government grants and loans?
Remember
this: No one has ever gotten a government grant or loan by paying
an up-front fee to the middle man.
Lenders
for government grants and loans do not typically charge up front
fees. If they do... they are substantial institutions so that
you know who the lender is and where to find them.The loan broker
generally gets a point or two from the loan and it is paid at
the close of escrow from the funds in the escrow account.
Just
for the record, there are no signature loan programs in the world
unless it is your own banking relationship. You can borrow money
without collateral but it involves having good credit. Companies
don't make a habit out of lending money without good credit or
some type of collateral. If you see an ad for a signature loan
program for a government grant or loan you can bet there is an
up front fee.
Government
grants and loans are another thing. Government grants are available
to those who study the rules and regulations and follow up with
the precise required application and who fall into the exact
category for qualification. Generally speaking, one must step
back to see how government grants work in order to get a good
perspective on the programs. Government grant programs are set
up to benefit specific constituents or constituencies of a particular
politician or group of politicians. This is how politicians reward
the folks who get them elected.
I
once owned a vacant house that had a sensational view of San
Francisco from across the bay. A friend of mine called one day
and said a friend had a government grant to make a movie and
wanted to know if they could use the house for the shoot. I agreed
and later met the person who had the grant... Guess who ? It
was Walter Mondale's daughter. So, unless your father was vice
president of the United States, don't expect to pick up a lot
of freebies from government grants.
Since
I have never been politically involved, I have had zero luck
in obtaining a government grant or loan or government benefits.
A friend of mine who started a company that grew into a very
large company once said ' I never could qualify my company for
a Small Business Administration loan... I was either too small
or too large for the program '.
Free
Scholarship and Government Grant Money...When my daughter was
going off to college... I paid a woman to assist us in foraging
for a scholarship of some kind. She had a franchise from a national
company which supplied information about many, many scholarship
programs from all sorts different sources. After spending a good
deal of time reading through the list of hundreds of different
scholarships available... my daughter did not apply for even
one of them.
The
application process is very extensive and what is required for
one scholarship generally cannot be repackaged and used for another.
So, I must report that the few hundred dollars I paid for the
scholarship information was a complete waste. If you want to
throw your money away... do it on something you enjoy.
There
are government grants for college most of which are Pell Grants.
These are processed through the financial aid department of the
school you are attending or planning to attend. They are also
knowledgeable about government loans and if you are interested...
I strongly suggest that you spend the time to contact the school
you plan to attend...