Home Loan Options for Low-Income Families

It has long been thought that if your income is on the low end of the spectrum, you absolutely cannot get approved for a home loan. Well, the truth is there are actually many home loan options available nowadays for low-income families. Just because your income is on the low side, does not mean you have to give up the joys of home ownership. The following are some great home loan options for low-income families.

Federal Housing Administration (FHA) Loans

One viable home loan option for low-income families is a loan backed by the Federal Housing Administration, or FHA. These loans are available through many FHA-approved lenders throughout the United States. They are great for lower-income families because they are insured by the FHA, which makes it easier for some borrowers to qualify. FHA loans require low down payments (usually 3.5%) and often come with lower interest rates. People who apply for an FHA loan must have a decent credit rating and the ability to make their monthly payments. If you have been turned down for a conventional mortgage in the past, you may be able to get approved for an FHA loan.

United States Department of Agriculture (USDA) Rural Housing Service Loans

Another great home loan option for low-income families is a loan through the United States Department of Agriculture, or USDA. The USDA’s Rural Housing Service provides zero-down home loans directly to low-income borrowers, which eliminates the need for a private lender. To qualify for one of these loans, the property you are interested in must be located within an eligible rural district. Keep in mind there are income limits on this type of loan, making it an ideal option for families with low incomes.

Department of Veterans Affairs (VA) Loans

There is also a great home loan option available to low-income veterans. If either you or your spouse qualify as a veteran, you may be able to get approved for a zero-down home loan. These loans are insured by the Department of Veterans Affairs, or VA. The loans are available through many VA-approved lenders and require you to meet certain income guidelines.

Other Options

Many state-sponsored home buying programs also exist for low-income families. Depending on your specific state, your family may qualify for a low-income mortgage, monetary grants or financial aid, or educational mortgage counseling. The Department of Housing and Urban Development (HUD) has a great informative website that has a listing of housing programs available in each state. Make sure to check out all the options that are offered in your state so you know exactly what type of help exists. Many people do not realize the great programs that are out there until they take a look for themselves.

These are all great home loan options for low-income families. By exploring your choices and applying for help, you should be able to find a program that works great for you and your family. Once you purchase your first home, you will be so glad you took the time to check into these home loan options.

Guest post from Harper Ryan. Harper writes for HomeLoans.org.


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