Good NestingWhat keeps many people in the vicious cycle of renting? Low income, a poor credit history, and a lack of savings. If that sounds like your financial situation, there is some good news:
You can overcome those obstacles with the help of resources that assist low-income families with buying homes. Here is just a sampling of such resources.
Housing Counselors
The U.S. Department of Housing and Urban Development (HUD) has local housing counselors that can help you become a homebuyer, even if your credit and income are lacking. Whether you want to discover programs to help you buy a home or are seeking rental assistance until you get your finances in order, go here to find the local housing counselor near you.
Section 502 Guaranteed Loan Program
If you come from a low to moderate-income household, this program can help you buy a primary residence in a rural area that’s safe, sanitary, and affordable. Since the government guarantees loan notes to lenders, this opens the door for people to get approved for a mortgage despite poor credit or a lack of a down payment.
In fact, if you qualify for the Section 502 program, you could buy a rural home with no money down. And to make owning a home even more affordable, you could get an extremely low-interest rate on your mortgage and have 33-38 years to pay it off. In other words, this program can make owning a home more affordable than that monthly rent payment.
VA Home Loan Guaranty Program
You can purchase a home with no down payment via this government program intended for military veterans.
That’s not all, though, as the VA Home Loan Guaranty program also offers affordable interest rates, waives the need for costly private mortgage insurance (PMI), and can give you payment assistance if you fall behind on the loan.
FHA
If you go to a bank looking to get approved for a mortgage, they may reject you if your credit history is less than stellar and you lack savings for a down payment. These obstacles can make it impossible for low-income families to buy homes, which is why FHA loans can save the day in such situations.
An FHA loan is backed by the Federal Housing Authority. If you default on the loan, the FHA will pay the bank and cover their loss. Knowing this, banks are less fearful of lending to people with bad credit and no down payment when the FHA is involved, which is why this may be your best bet for becoming a homeowner.
If you can show a stable work history and the ability to make an affordable monthly mortgage payment, the FHA loan could be right up your alley. With financing for as much as 96.5 percent of the home’s price, you can get into a house without needing a ton of money down.
Habitat For Humanity
Would you like to live in a safe, clean, affordable home by getting a mortgage that waives interest, closing costs, and a down payment? Then a Habitat for Humanity home may be right for you, as it makes homebuying accessible for low-income families.
