Julia Anderson
Do you feel as if you will never own a home because you are constantly paying a ton of rent to your landlord, which makes it impossible to save for a down payment?
If so, you are not alone, as many people feel stuck as renters. Luckily, there are several programs that can help you transition from renter to homebuyer, even if your income is on the low side. Here are some of the best of the bunch.
FHA Loans
Many banks are fearful of lending to people who don’t have enough money for a down payment or have a low credit score. FHA loans remove that fear and make mortgages more accessible since the Federal Housing Authority backs them. If someone defaults on a loan, the FHA will cover the bank’s loss.
Beyond making mortgages more accessible for low-income households, FHA loans also let you finance as much as 96.5 percent of a home’s purchase price (conventional mortgages usually allow up to 80-90 percent financing). This reduces how much is needed to save for a down payment, eliminating a considerable homebuying obstacle.
While FHA loans can help you qualify for a mortgage without great credit or a ton of savings, you will probably need to show stable work history and an ability to make monthly payments, so keep that in mind.
2023
Tax Forgiveness
We know how challenging it can be to pay off your tax debt.
The IRS just announced the 2023 Fresh Start Program, to qualify more people for tax relief!
Habitat For Humanity
You won’t get a free home from this popular program, but you can buy a safe, affordable home with a manageable mortgage that excludes interest costs, a down payment, and closing costs.
Should you qualify for a Habitat for Humanity home, you will have to pay back that affordable mortgage within 15 years.
Home Possible Program
This low-income homebuying program comes from Freddie Mac, a lender linked to the federal government. If you have a low to moderate income and live in an underserved community, Home Possible can make purchasing a house more affordable with down payments of just three percent.
Fannie Mae HomeReady
Here is another homebuying program for low-income families that eliminates the obstacle of costly down payments. You can get up to 97 percent financing from HomeReady, so you won’t have to wait years until you have enough money saved to buy a home.
Local Programs
Your city or state may have a homebuying program of its own that lets you transition from a renter to a property owner. While your mileage may vary according to location, some local programs can help first-time homebuyers purchase property despite a low credit score and little money down, while others can offer down payment assistance. You could also find a home renovation program that lets you buy an affordable property, remodel it, and move in without breaking the bank.
To see which local homebuying programs exist near you, use this link from the HUD.
