Single mothers in Arizona face many challenges in buying a house. The high cost of real estate properties, fierce competition among cash buyers and outside investors, and low inventory make the home-buying process for single mothers more daunting. The median sale price of housing properties in Arizona increased to $462,400 in 2022 from $372,700 in 2021. The numbers are even higher in popular Arizona communities. Many single mothers in Arizona feel that the home-buying dream is a far-stretched idea. Fortunately, there is a lot of financial help available for single moms throughout Arizona through affordable housing loans.
How To Find Home Loan Programs For Single Moms In Arizona?
Single mothers who are looking for home loan programs in Arizona can check with the real estate agent, private lenders, local nonprofit housing advocacy groups, as well as state housing finance agencies for homebuyer programs and affordable loan options in their area. It is always a good idea to learn about specific eligibility standards before beginning the application process for each program. First time homebuyer programs, nationwide resources, and down payment assistance are some options single moms can avail to fulfill their dream of becoming a homeowner. Federal government programs like FHA, USDA, HUD, and VA are designed for single moms with low credit scores or income.
What Are The Different Single-Mom Home Loans In Arizona?
There are a lot of state and county programs in Arizona that offer affordable loans along with forgivable second loan foreclosing cost or down payment. The availability of state or federal government-sponsored lending programs will help you to buy a home even with poor credit scores or limited resources. Most programs in Arizona require single mothers to have a credit score between 580 to 680, while some also accept them with lower scores. Some of the resources are as follows:
1. FHA Or Federal Housing Administration Loans
The Federal Housing Administration is a part of the United States Department of Housing and Urban Development. It ensures mortgages for low-income borrowers, primarily single mothers with low credit scores, and competitive interest rates. Single mothers can choose their preferred lenders who can participate in the program. These loans require single mothers and low-income borrowers to pay 3.5% of the home purchase price as a down payment if their credit score is 580 or even higher, while borrowers with a credit score of 500 must pay a down payment of 10%.
2. USDA, United States Department Of Agriculture Loans
Single mothers and other moderate-income borrowers are eligible to apply for the United States Department of Agriculture loans if they are purchasing a property in specified rural regions. No down payment is required by borrowers on these loans, as USDA guarantees them. Eligible borrowers have to pay an upfront guarantee fee as well as an annual fee for mortgage insurance. These loans are of great use to low or highly low-income earners. To be eligible for this program, you need to meet the property income eligibility as stated by USDA.
3. VA, Department Of Veterans Affairs Loans
Veterans, active duty military members, and eligible surviving spouses are eligible to apply for the Department of Veterans Affairs loans which the Department of Veterans Affairs backs. Eligible single moms can use VA loans for purchasing, building, or improving their homes at lower interest rates than conventional mortgages and are also not required to pay down payments. Eligible borrowers have to pay a one-time funding fee that will be rolled into the mortgage.
4. HUD Good Neighbor Next Door Program
The HUD Good Neighbor Next Door Program enables firefighters, police officers, teachers, and emergency medical technicians to qualify for affordable mortgages in the areas they serve. Borrowers can receive assistance of up to 50% off on a property that refers to a revitalization area. Eligible single mothers must live in these homes for at least three years.
5. Pathway To Purchase Home Buyer Assistance Program
This program provides homebuyers, including single mothers, fixed-rate mortgages of 30 years and down payment assistance in the form of a forgivable second mortgage. The Pathway. Single mothers and other eligible homebuyers can avail of this program using a Freddie Mac FHA Advantage® Mortgage through an approved lender. To be eligible for this program, you must ensure your annual income does not exceed 80% of the area’s median income and the purchase price is at or less than $371,936. Single mothers and others can receive assistance up to $20,000 or 10% of the home purchase price, whichever is less. As funding for this program is limited and is provided on a first-come, first-served basis, single mothers are encouraged to apply for it as soon as possible. The program requires at least one borrower to complete a homebuyer education course before applying.
6. Home+Plus Home Buyer Down Payment Assistance
The Arizona Industrial Development Authority provides this program. This program enables qualifying buyers, including single mothers, a 30-year fixed rate mortgage and down payment assistance. This program is the right fit for low or moderate-income individuals with little savings to pay for the front homeownership costs. Creditworthy borrowers, including single mothers, can receive assistance up to 5% of the mortgage amount in the form of a deferred or no-interest second mortgage for a minimum of three years or until they decide to refinance or sell the home. To be eligible for this program, single mothers need to have a credit score of 660 or above. The income should not exceed the limit of $112785, and the debt-to-income ratio should be below 50%. Single mothers must complete a homeownership education course before applying, and the maximum loan amount must be at or less than $396,680.
Being a single mother can be incredibly challenging when you try to obtain a house loan. To address the housing needs and challenges of single mothers, Arizona has designed many homebuyer assistance, federal programs, and affordable loan options that enable them to achieve their goals. By availing of these loan options, you can fulfill your dream of becoming a homeowner.