An individual is not likely to find a free grant to purchase real estate or start a business. “Don’t buy the hype,” says Grants.gov, the federal clearing house website for grants. Federal agencies don’t do grants for that. Grant money is rarely made available to rehabilitate real estate. But this is slightly more likely than finding a grant to purchase real estate or start a business.
Why Grants Are Made
The government, corporations and private individuals foundations offer grant programs to address public issues and for specific purposes. Grants.gov states that federal agencies do not give money to individuals for business start-ups or for purchasing equipment or real estate or for operating expenses, debt reduction or expansion. Unless a grant proposal meets the highly specific goals of a grant program, the chances of its being funded are almost nonexistent. In most cases, an individual or for-profit business can not meet eligibility guidelines for grants.
To be eligible for most grants, an organization needs to be a nonprofit organization or a member of a collaborative project led by an nonprofit organization. Some grants known as formula grants only go to smaller government agencies to distribute at the local level. Government organizations at the federal or state level do not give grants to for-profits except for specific research and development projects in science, technology, medicine, education or defense. Private or corporate nonprofit foundations are prohibited by the IRS from giving grant money directly to individuals or for profit businesses.
Rehabilitation is one of the few activities in which government or private foundation grant money may pass to a for-profit business or individual. Most of the time, however, these funds still have to pass through a nonprofit and/or state agency before they are disbursed. If a state or local agency is interested in rehabilitating a rundown neighborhood or rural community, they may pay for-profits to do the work. If a community lacks important infrastructure, such as water, sewer or telecommunications systems, a nonprofit agency or government may hire the work done by a for-profit. They will not help with the purchase of land or equipment, except through special low-interest loans, but the grants can pay for restoring the property. Another way to get help with rehabilitation of property is through historical preservation grants for structures which have been declared historical sites. The funding will likely have to pass through a nonprofit historic restoration society or organization rather than going to the property owner.