It can be challenging for low-income home buyers to locate a good home when they fail to meet the credit score and income requirements. It is even more challenging for single moms who take care of their children and provide for their families on a single source of income. Every single mother wishes to raise their children in a nurtured environment, but few can realize their dream. The federal and state governments of Michigan assist single moms to become homeowners and obtain affordable home loans.
How Does Michigan Assist Single Moms With Home Loan Programs?
Michigan offers a wide range of first-time home buyer programs, down payment assistance programs, and affordable mortgages to assist single moms looking for loan options to purchase a home. The VA, USDA, FHA, and Conventional loans are available throughout Michigan, provided single moms can meet the income and credit score requirements. Additionally, the state of Michigan also provides exclusive programs to single moms and low-income citizens in the form of MI Home Loan Programs. Low-income single moms face difficulty paying down payments or qualifying for conventional mortgages due to low income and poor credit scores. Many down payment assistance programs and first-time home buyer loan programs are available in Michigan. It just needs a bit of time and effort for single moms to locate the right program which aligns with their needs.
Following is the list of government assistance and home loan programs that single moms in Michigan can avail of.
Zero Down Payment Single Mom Home Loans In Michigan
Zero down payment loan programs are available for single moms throughout Michigan that assist first-time home buyers in acquiring a property without paying any down payment on their loans. Some of the popular government-backed loan programs in Michigan with zero down payment assistance are VA and USDA loans.
1. USDA loans
The United States Department of Agriculture offers USDA home loans to single moms belonging to low and moderate-income groups and other home buyers who are rural residents in targeted areas of Michigan. This type of mortgage is comparatively less expensive than other conventional loans. USDA loans have three types of programs: Single-Family Housing Direct Home Loans, Section 502 Guaranteed Rural Housing Loans, and Section 504 Home Repair Programs. Each program has its own set of benefits and eligibility criteria. To qualify for a loan, single mothers must meet the lender’s terms and income criteria and also occupy a house in Michigan as their primary residence.
2. VA loans
Eligible military service members, veterans, and their eligible spouses or families can opt for VA loans. The Department Of Veterans Affairs provides these loans and requires no down payment on the mortgage. Single mothers who are first-time home buyers can make use of these loans to finance a lot of properties such as condominiums, single-family homes, new homes, etc. Alternatively, they can also obtain construction loans for buying an existing property and improving, renovating, or reconstructing it. This is a good deal for eligible single moms as the mortgage provides affordable rates and eliminates repayment penalties. You can also reduce your borrowing expense and avoid buying private mortgage insurance.
Low-Down-Payment Loan Programs For Single Moms In Michigan
First-time home buyers in Michigan who are permanent residents of the state are eligible to apply for low down payment loan programs that enable them to purchase a house with less than 20% down payment. Single moms are also eligible to apply for these loans. The two popular low-down-payment loan programs in Michigan are FHA and Conventional loans.
1. Fannie And Freddie Loans
Fannie and Freddie mortgages, or Conventional loans, are private loans that single moms can opt for if they are looking for low-down payment loan programs in Michigan. Even though the government does not ensure these conventional loans, they are available to eligible candidates with more flexible loan terms and criteria. Single moms eligible for these loans need not pay any tax or government obligations if they are considering Fannie or Freddie mortgages. Borrowers have to pay an average of 20% of their home purchase price as a down payment, while some lenders can also require a down payment of only 3%. To qualify for this loan, you must pay a debt-to-income ratio of 45% or even lesser and have a minimum credit score of 620.
2. FHA Loans
Single moms with insufficient or damaged credit histories still benefit from FHA loans. FHA loans are less restrictive compared to other mortgages and require a minimum credit score of 500, a down payment of a minimum of 3.5%, and debt to income ratio of 56.9 percent. These loans have fixed interest rates, and the repayment terms range between 15 to 30 years.
Michigan Home Buyer Loan Programs
Single mothers looking for the best alternatives to government-backed loan programs can consider looking for the following first-time home buyer programs in Michigan. These programs are only available to permanent residents of Michigan who can fulfill the eligibility criteria of the loan programs.
1. MSHDA Down Payment Assistance Loan Program
MSHDA stands for the Michigan State Housing Development Authority, which provides a down payment assistance loan program to single moms and other low-income home buyers willing to attend homeownership goals. It helps if you meet the specific eligibility criteria, credit history, income level, and property type to receive benefits from the loan.
2. MI Home Loan
This is a mortgage product that is designed for first-time home buyers throughout Michigan who are looking to purchase a property in a specific region. To avail of this loan program, single moms must work with an approved lender.
When purchasing a property for the first time as a single mom in Michigan, it can be an intimidating experience for you. Fortunately, there is a wide range of home buyer programs and affordable loan options in Michigan that enable single moms to explore and pick the best. There are a lot of local, state, federal, and county programs in Michigan that single homes can avail of to get the best deal.