Home Buying Options for Low-Income Families
In America, buying a home is considered a life milestone. Unfortunately, not everyone will be able to realize that dream. However, there may be more options available than you think. There are many government programs, lenders, and private programs available to people that have low incomes. If you think you will never be able to buy a home, think again and keep reading.
Housing Counselors Through HUD
The U.S. Department of Housing and Urban Development should be the first place you look for help when searching for home buying options. These counselors are available in every state and they have the state-specific knowledge required to show you exactly what your options are. In addition, they can help you set up a budget, find an affordable apartment, help you through foreclosure, and even a reverse mortgage. Visit their website for more information.
Maybe you have a steady income but cannot realistically save $10,000 – $20,000 for a down payment on a new home. FHA are loans that are backed by the federal government. They allow the borrower to finance up to 96.5% of the total price of the prospective home (traditional loans only finance up to 90%). This means the down payment would only need to be 3.5% of the total purchase price of the home. For example, the down payment for a $180,000 home would be $6,300 instead of $18,000.
The ReadyBuyer HomePath Mortgage
What is that?! Fair question. Well, typically, when a mortgage is applied for, only the incomes of the people on the mortgage is considered. With this new option from Fannie May, everyone living in the house with income will be considered. For example, if your parents live with you, if you have children who live with you and earn an income, or if you rent rooms in your house to boarders, you can include that as income when being considered for this loan. This loan does mandate that the buyer make at least a 5% down payment.
Conventional Loan 97
The Federal Home Financing Agency instituted The Conventional Loan 97 which allows buyers to only put down 3% (0.5% less than the FHA loan). Other considerations for this loan are: the loan must be for less than $424,100, it must be a single unit dwelling, and it must be a fixed rate mortgage.
FHA Down Payment Grants
Even with the more affordable mortgage options discussed in this article, a down payment ranging from $1000 to $5000 is not realistic for some people. Thankfully, the people at FHA understand this. They researched every state and put together a list of down payment grants. For more information on these programs, visit this site.
People with low means should have the opportunity to own their own home if that is their dream. The Debt Relief Education Foundation is here to help low income families realize their dreams. Financial burden can seem overwhelming, but with the right people in your corner, you can achieve financial independence and reach your goals. Contact us today and get your financial life back on track. We help people like you every day at no cost.