Home Loans For Single Moms
There are many government housing loans for single moms that are available to low-income women and first-time homebuyers so that they can get a roof over their heads and raise their children in a safe and nurturing environment. These programs are provided through private nonprofits as well as HUD. Loans for single moms to buy a house are specific programs designed so that single moms can attain the goal of home ownership, which they would otherwise not have qualified for. As you prepare yourself for homeownership it is essential to explore all the programs and loan options that are available at your disposal.
Are There Home Loans For Single Moms?
Getting approved for mortgages while being single can be a complicated process. Living on a single income can make it challenging to obtain a loan and buy a property. In addition, paying for down payment and closing costs becomes more problematic for low-income single mothers. If you’re wondering whether there are low-income home loans for single mothers or not, then the answer is definitely ‘yes.’ There are many down payment assistance programs, low-income home loans, and first-time home buyer grants designed for single moms that make it possible for them to overcome all barriers and get approved for home loans. There are many home loans for low-income single moms. Each loan program has unique benefits and eligibility criteria ranging from credit score minimums or low down payment to no interest rate.
Can A Single Mom Get A Home Loan?
Are you a single mom concerned about whether your income is sufficient to qualify for a mortgage and buy a new home? Although it can be challenging to get a home loan on a low income, many home loan grants for single moms enable needy women to make homeownership attainable even with low wages. There are no particular minimum income limitations for purchasing a house. It is tricky for low or moderate-income earners to get approved for a mortgage due to the debt-to-income ratio, credit requirements, and mortgage down payment requirements. Homeownership can be feasible with specific loan programs like VA mortgages, FHA loans, USDA mortgages, etc.
What Are The Different First-Time Home Buyer Loans For Single Moms?
There are many single mom house loans and grants available for first time home buyers who cannot purchase a home of their own because of limited resources and income limitations. Following are examples of home loan programs for single moms.
1. The Chenoa Fund
The CBC Mortgage Agency provides the Chenoa Fund, a national down payment assistance program that increases nationwide sustainable and affordable home ownership. This program covers individuals earning low or moderate income and is creditworthy. The program requires a credit score of 600 or higher in all states of the USA except New York. This is an ideal option for low-income single moms having FHA loans and can prefer either of the following options
- 10-year repayable loan
This is a repayable loan that requires a monthly payment and has an interest rate of 2% higher than an FHA loan
- 30-year forgivable loan
This loan does not require monthly payments and has a 0% interest rate. To qualify, you must ensure you have up-to-date payments on your FHA home loan. You also cannot refinance or sell your house. The government backs the 30-year forgivable loan.
2. Bank Of America’s Community Home Ownership Community
Single mothers looking for programs to cover their closing costs and down payments can approach the Bank of America’s community Homeownership Community Program, which will be the right fit for them. This homeownership program is available for first-time home buyers, and it includes closing costs up to $7500 and down payment assistance up to $10,000 or 3% of the purchase price, whichever is less. This program also provides affordable loan solution mortgages up to $647200 and a 3% down payment. Single mothers planning to buy a home in a high-cost region can get loan assistance up to $9780, along with down payment assistance of 5%. You can qualify for this program if you meet the income requirements and other eligibility criteria. In most cases, single moms and other applicants must complete a first-time home buyer education program to qualify.
3. NHF, National Homebuyers Fund Inc.
This nonprofit corporation enables single moms to purchase their first home. The program covers 5% of the home’s mortgage that can be used toward closing costs, down payment, or both. First-time home buyers must work with approved lenders to qualify for the National Homebuyers Fund’s down payment assistance program. The qualification of the program may vary depending on your location. The state government will determine the income restriction through this program, and a minimum credit score of 640 will be required. NHF assistance can be used for USDA, Conventional, FHA, or VA loans. You must ensure your debt-to-income ratio is 45% or less before applying for NHF.
Different Home Loans For Single Moms
There are different types of home loans for single moms that enable them to fulfill the dream of having a house that they can call it to be their own. You can ask your preferred lender if any loan program is available for low-income, credit-worthy borrowers. Following are some helpful home loans for single moms that will be a right fit for you if you are looking for ways to become a homeowner.
1. VA Home Loans
If you are an active or reserve member of the veteran, armed forces, or eligible spouse, you can obtain VA loans to fulfill your dream of becoming a homeowner. Once approved for this loan, you need not provide mortgage insurance or a down payment. In addition, the closing costs of the loan are also kept minimum. VA loan is accessible in every state and tribal land through Native American Direct Loan. VA guarantees a part of the loan and collaborates with private lenders so that low-income home buyers, primarily single mothers, can get low-interest rates. There are no particular loan limits if you are in a position to afford the house which you’re willing to buy.
2. FHA Home Loan
FHA or Federal Housing Administration loan comes with a lower down payment and closing costs. FHA provides fixed-rate loans nationwide for 15-year and 30-year terms. Low-income borrowers like single mothers can get closing costs and down payment assistance. This is the best home loan for single moms with poor credit scores and low or moderate income. Borrowers with a credit score ranging between 500 to 579 are required to pay a 10% down payment on the value of their property. With a score of 580 or more, they only have to put a down payment of 3.5% of the cost of the home. Borrowers are required to pay mortgage insurance with this loan option. To apply for this loan option, you must ensure that your property meets all the eligibility requirements of the Federal Housing Administration guidelines. For instance, the loan limit range for properties will be around $472,030 to $1,089,300 across the United States. You can use the FHA lookup tool to check the FHA loan limit range in your particular area.
3. HomeReady® Mortgage From Fannie Mae
The HomeReady® Mortgage From Fannie Mae requires borrowers to have 80% of the area’s median income. If you want to know the area median income limits of your geographic area, then you can use the Fannie Mae AMI lookup tool. This low-income home loan option requires a minimum credit score 620 to apply. However, having a credit score of or higher than 680 will fetch better rates for borrowers. For single mothers, this home loan option is quite feasible as it only comes with a 3% down payment option, and funding from grants, Fannie Mae Community Seconds, and relatives is also allowed. Borrowers may get lower mortgage insurance which will get canceled when their loan balance falls below 80% of the loan-to-value ratio. LTV or loan-to-value ratio is the amount of your mortgage versus the actual value of your property. There are also no geographic limitations on this home loan opportunity. Finally, single mothers must take an approved HUD-approved course or Fannie Mae HomeView online course to qualify.
4. FDIC Loans By Operation HOPE Home Buyers Program
Low-income homebuyers like single mothers can get FDIC-approved loans from the Operation HOPE Home Buyers Program. This program also provides first time home buying assistance and down payment assistance to home buyers who are financially challenged. Operation HOPE provides multiple grants to boost financial knowledge among underserved communities. It has also designed a first time home buyer education program through which it provides HUD-certified coaches among low-income home buyers and guides them throughout the home loan procedure. As a single mom, you will get the advantage of obtaining one-on-one coaching and group training sessions. Operation HOPE team will also provide you additional support by connecting you with a lot of professionals while you pursue an FDIC loan.
5. USDA Single Family Housing Guaranteed Loan Program
This home loan program provides a year-round application procedure. Single mothers in rural regions can use this loan to buy or build a home. The USDA Single-Family Housing Guaranteed Loan Program does not require qualifying applicants to make any down payment. This program provides 100% financing from lenders and guarantees 90% of the loan amount. If you’re a single mother living in a rural area, you can be eligible for this program, provided your income does not exceed 115% of the area’s median income. Using the USDA tool, you can quickly check the eligibility criteria for specific properties and your income limits. The best thing about this program is that no credit scores are required to become eligible. However, you may have to show a credit history to prove that you are in a position to repay your debts.
6. USDA Single Family Housing Direct Home Loans
The United States Department of Agriculture enables rural borrowers, including single mothers, to refinance their mortgages. This home loan option is designed especially for low-income borrowers who cannot pay their monthly mortgages because of their financial crisis. So, loan payments are kept affordable until they get back on their feet. USDA Single-Family Housing Direct Home Loans are available for low and highly low-income borrowers who cannot pay mortgage payments due to hardship or any other emergency crisis. To be eligible for this program, you must ensure your income is within the income limits of your area. The eligibility criteria of this home loan are not affected by a poor credit score unless borrowers have substantial federal debt.
Conclusion
Being a single mother can be challenging, especially when you are the sole breadwinner and provide for the family. As a primary caregiver, you must provide a safe and secure environment for your children. With the rising cost of real estate incomes, it is becoming difficult for financially challenged single mothers to buy homes. Meanwhile, there are many single-mom home loan assistance programs and loan options for single mothers that can assist them in becoming homeowners.
