Single Mom Home Loans Tennessee

The process of purchasing a house in Tennessee can be overwhelming for single moms who have to deal with many financial crises. Fortunately, Tennessee has multiple loan programs for single moms that assist them and enables them to attend homeownership goals.

How Tennessee Helps Single Moms To Avail Home Loans?

Single mothers often fail to obtain a conventional loan because of low credit and income requirements. Many low-income home buyers need assistance to make purchasing a home their reality. The down payment is generally 20% of their home’s total cost, which can impact their monthly mortgage payments. Tennessee helps single moms with many loan options that enable them to secure a cheaper deal. Tennessee has designed USDA, FHA, and VA conventional loans for single moms. There are also statewide programs available to Tennessee residents, including local homeownership programs that may vary depending on your county or city.

Zero Down Payment Loan Programs

First-time home buyers can avail of zero down payment loan programs in Tennessee that enable purchasing a property without paying a down payment.

1. VA Loans

The United States Department of Veterans Affairs provides VA loans to eligible veterans and military members, including their family members. These loans do not require a down payment; therefore, surviving spouses of military members can apply for this loan and obtain a house. With a VA loan, eligible single moms can finance many properties like condominiums, new homes, or single-family homes. They can also take out construction loans for rebuilding, improving, or renovating an existing property. VA loans offer a wide range of benefits like affordable rates and terms, no down payments, private mortgage insurance, lower closing costs, and no penalty fee.

2. USDA Loans

The United States Department of Agriculture offers USDA loans to single moms looking to purchase a property in rural areas. USDA Loans are more affordable than Conventional loans such as Fannie and Freddie loans. There are three popular USDA loans that you can avail of as a single mom: the Section 504 Home Repair Program, Section 502 Guaranteed Rural Housing Loan, and Single-Family Housing Direct Home Loan. First-time home buyers, including single moms, are required to live in the home as their primary residence and also meet the income criteria as required.

Low-Down-Payment Single Mom Home Loans In Tennessee

Home buyers in Tennessee, including single moms, can opt for many low-down-payment loan programs that enable them to purchase a home even with a down payment of less than 20%.

1. Fannie And Freddie Loans

Fannie and Freddie are Conventional loans that help single moms to pay less down payment, unlike other standard loans. Fannie or Freddie loans are private mortgages that are not government-backed but are accessible throughout Tennessee and come with strict lending requirements. Single moms unable to obtain loans or meet federal obligations can consider opting for these loans. They come in the form of conforming and nonconforming loans. Although the down payment required is generally 20% of its purchase price, conventional mortgage lenders ask only for 3% of the down payment. Home buyers have to pay private mortgage insurance to protect the interests of the lenders in case they default on their mortgage. The Conventional loan may require a credit score of 620 and a debt-to-income ratio of 45%, depending on the private lender.

2. FHA Loans

The Federal Housing Administration offers FHA loans which are ideal for single moms and low-income individuals who have poor credit scores or damaged credit histories. This is a low-down-payment mortgage that private lenders offer according to the policies and guidelines of the Federal Housing Administration. Unlike other loans, FHA loans are not so stringent. The minimum credit score that single moms need to have is 500, with a maximum debt-to-income ratio of 56.9%. FHA loans in Tennessee require a minimum down payment of only 3.5% with fixed-rate interest and repayment terms of 15 and 30 years. The loan limits of single moms will vary depending on the county or state in which they live.

Tennessee HomeBuyer Loan Programs

The Tennessee Housing Development Agency offers many affordable loan options for single moms and first-time home buyers.

1. Great Choice Home Loans

The THDA Tennessee Housing Development Agency provides Great Choice Home Loans with repayment periods of up to 30 years and fixed low interest. Low-income borrowers having a minimum credit score of 640 are eligible to apply for these home loans. Single moms have to pay a down payment of 3% for conventional loans and a 5% down payment for USDA or FHA loans. In addition, they are also required to meet the income limits and complete a homebuyer education course

2. THDA Home Ownership For The Brave

This program is designed for military service members and their family members so that they can get a low rate of interest on mortgages. This program is available to first-time home buyers as well as repeat home buyers. You need to have a credit score of a minimum of 640 to avail of this program and fulfill the purchase and income price limits of the loan program. This option is limited to active duty service members, veterans, or eligible family members.

3. THDA Great Choice Plus

Single moms who have applied for Great Choice Home Loan and require additional help with cash to cover the closing costs and down payment can apply for the Great Choice Plus Program, designed to ease the financial stress of single moms and home buyers. It is a second mortgage loan with a low-interest rate and 30-year repayment terms. You can pay back the loan in monthly payments. The eligibility requirements of this program are exactly as those of the Great Choice Home Loan Program.

Conclusion

By availing of low-down-payment loan programs, affordable mortgages, and zero-down-payment home loan programs, single mothers may determine the best option and fulfill their specific needs. Single homes can also contact the Tennessee housing development agency to locate home buyer programs and affordable loan options that will reduce their financial burden and enable them to get the best deal.