Navigating money and life as a single mom is difficult. There are many financial challenges that you have to face as a single mom especially if you want to own a house and support your family. Mortgage grants for single moms can help you in this situation. Single mothers find it an impossible feat to secure a home however there are many ways to make the process straightforward and easier. This guide will help you to learn how to get mortgage grants when you are a single mom.
Are There Programs To Help Single Moms Pay Mortgage?
Purchasing a home as a single mother can be financially difficult as you live on one income and have many responsibilities to fulfill. Fortunately, there are many home loan programs and mortgage assistance grants for single mothers that help them to reduce the cost of financing or buying a house. If you’re looking for a mortgage for single moms with bad credit then take time and effort to research the plenty of options that are available near your area. You have a good chance to qualify for them if you can meet eligibility criteria and showcase a robust financial need.
A home is an indispensable asset that not only provides shelter to you and your kids but also helps your children to grow in a nurturing environment. Making mortgage payments timely as a single mother is a difficult financial obligation. Childcare payments, repairs, utility bills or unemployment may prevent you from achieving your homeownership goal. Fortunately, mortgage assistance programs exist to assist single moms with mortgage payments. The mortgage programs for single moms are structured to keep single mothers and their kids housed. First time home buyer programs, down payment assistance, foreclosure programs, and many other grants are available for single moms in the United States. For instance: SONYMA or the State Of New York Mortgage Assistance provides special mortgages for single moms in NY and enables them to purchase a home. The mortgage programs are available for first time home buyers as well as repeat home buyers in New York who are purchasing a property in a federally designated target area.
How To Improve Chances For Getting Mortgage Loans For Single Moms?
As for reports, less than one-third of single moms can turn their dream of homeownership into reality, however, if you’re a single mom then you can fulfill your dream by availing of a lot of mortgage grants that are designed in the United States. As with any other loan for single moms you have to demonstrate that you have sufficient income, assets, and room to afford the mortgage payments. With one source of income single mothers feel that they are at a disadvantage. Some other factors which will help you in improving your chance of getting a single-mom mortgage are as follows:
1. Good Credit Score
Lenders consider the credit rating and credit history of single mothers before approving their mortgage grants. Single mothers who are opting for conventional loans should have a credit score of between 620 to 670. A higher credit score will help you to fetch the best loan conditions and interest rates.
2. Large Down Payment
A good way to boost your chance of getting approval for a mortgage loan for single moms is to save at least 20% or more of the home purchase price. This way you can borrow less money and reduce the risk to the mortgage lender. There are many down payment assistance programs that single moms can avail of.
3. Low Debt To Income Ratio
The debt-to-income ratio is a measurement of the share of your income that is spent on debt repayment. Lenders generally follow rules 28/36 when giving loans to single moms. In other words, your monthly mortgage payments including the interest, principal, insurance, and taxes must not exceed the limit of 20% of your gross monthly income. The existing debt like a credit card, and management of student loan payments must not add more than 36% of your monthly income.
Nationwide Home Buying And Loan Programs
While considering low-cost mortgage programs for single moms available throughout the United States you can take a look at the following federal loan options which require you to demonstrate a financial need.
1. FHA Loan
FHA loans are issued by traditional lenders and banks however are backed by the Federal Housing Administration and come with flexible terms, qualifications, and conditions. This single-mom mortgage assistance makes it easier for single moms to avail of a mortgage loan easily if they fail to qualify for loans from other sources due to poor financial history and bad credit scores For instance, single moms have to deposit as little as 3.5% with a credit score of 550 or higher.
2. USDA Loans
First time home buyers belonging to the low-income category and living in rural areas of the United States are eligible to qualify for a USDA home loan. These loans are insured by the United States Department of Agriculture. Such loans enable single mothers to borrow without requiring them to pay any down payment. Moreover, by availing of this mortgage grant for single moms, you need to pay an interest rate as low as 1%.
3. VA Loan
VA Loan is a federally backed loan option that stands for United States Veteran Loans and is designed for veterans, service members, and eligible surviving spouses. Single mothers belonging to the military or eligible spouses can avail of these loans without being concerned about paying a down payment.
4. Individual Development Account
Individual Development Bank refers to special bank accounts that are designed for helping people so that they can save for their business, buy a home, or for education purposes. Contribution to this account comes from free tax paychecks that are matched through your state’s Demonstration Project or Temporary Assistance For Needy Families Program’s money.
5. Habitat For Humanity
Single mothers who are potential buyers have to demonstrate a strong financial need to qualify for a Habitat for Humanity home. This organization not only assists low-income single moms who are in housing needs to locate affordable mortgage grants but also in fulfilling the dream of homeownership and getting a safe and secure house over their heads.
Home Mortgages For Single Moms
In addition to national options many local, city, and statewide programs are available for single moms and help them to fulfill their dream of homeownership into reality. Home mortgages for single moms include tax breaks, housing grants, and down payment assistance programs.
1. HUD Advisors
The Department of Housing and Urban Development provides housing advisors who can help single mothers to learn about little-known local programs that are available near them. Single mothers can also seek advice about how to walk through the general home-buying procedure and prepare for a home loan.
2. Local Housing Authority
This is the first place to check for mortgage loans and home assistance programs. A representative of the local housing authority will help you to locate housing programs and mortgage help for single mothers. You need to keep in mind that such programs and support may require you to have a specific income level or may require you to work with particular lenders.
3. The Home Affordable Modification Program (HAMP)
Single mothers who are facing foreclosure or eviction can save themselves and remain housed by applying for the Home Affordable Modification Program. Single-parent families struggling to cover their monthly bills can get mortgage rates as low as 31% of their income level. In some cases, the mortgage can be reduced to $1000. Single mothers who want to learn more about this program and how to apply should visit the official website before their properties are foreclosed.
4. The Principal Reduction Alternative (PRA)
Although this is not a home loan program, this program is designed to reduce the financial burden of single moms who want to purchase a home. Availability of the Principal Reduction Alternative Program is a way to reduce the outstanding principal balance of your home and divide the principal balance into separate accounts. There is an interest-free account as well as an interest-bearing principal account.
5. Home Affordable Refinance Program (HARP)
This program is designed for individuals whose homes have lost their value to get their mortgage reassessed. By availing of a Home Affordable Refinance Program you can reduce your interest rate and decrease the payments or sometimes get granted a short-term loan. Single moms can get further details by contacting the current mortgage lender or Home Affordable Refinance Program Lender.
6. Home Affordable For Unemployment Program (UP)
Single mothers who have recently become unemployed or lost their job find it difficult to cover their mortgage payments. Qualifying for the Home Affordable For Unemployment Program will help you to stop the monthly mortgage payments or get the payments reduced to 31% of your gross income for a year if you can meet all the eligibility criteria and qualify for the program. This program helps unemployed single parents to a great extent by reducing their financial burden until they find a new job opportunity for themselves.
Other Mortgage Help For Single Moms
Being a single mom brings unique financial challenges that make it impossible for you to pay rent or buy a house. Fortunately, different housing grants are available for single forms apart from those mentioned above which can make housing costs reasonable for you.
1. The Chenoa Fund
This is a good option for single mothers who are searching for affordable mortgage grants or down payment loan options. This is a government-chartered organization that provides down payment assistance on FHA loans with two options: a 30-year forgivable loan and a 10-year repayable loan. The repayable loan requires single moms to get monthly payments with an interest of 2% higher than the mortgage rate. On the other hand, the forgivable loan has a 0% interest rate and does not require a monthly payment but you need to stay current on the mortgage payments. If you’re unable to afford a down payment then this housing program will be the right fit for you
2. National Homebuyers Fund
This is one of the best programs for single moms who want to become a homeowner. The National Homebuyers Fund is a non-profit organization that offers down payment assistance and housing grants for single moms and other eligible low-income home buyers. It offers down payment assistance and closing costs to qualified single moms and they can access funding up to 5% of the mortgage amount. Borrowers need to have a credit score of 640 as well as a 45% or less debt-to-income ratio to qualify. The National Homebuyer Fund is an excellent way for single moms to overcome all financial barriers toward their homeownership goal.
3. Good Neighbors Next Door
The Department of Housing and Urban Development has developed an initiative known as the Good Neighbours Next Door Program that reduces the overall cost of buying a home for eligible borrowers including single mothers. You need not have kids to qualify and it is an amazing program for low-income single parents who are struggling to get a house. To qualify you must be a full-time teacher at a state-accredited private or public school, a full-time law enforcement officer working for the federal government or for local government, or a full-time first responder in a department that is run by a state, federal, or local agency.
Single-parent families receive mortgage relief through different programs. The above-mentioned housing services, mortgage relief programs, and help enable single mothers to turn their dream of homeownership into a reality. Single motherhood can be challenging and you may find it difficult to pay for your housing costs. Research in-depth to find the right program that aligns with your needs and put in your hard work to fill out the application and avail the resources.