Today, there are several low-income home loans available that can help you to become a homeowner even if you are tight on funds.
Finding the right option can take time, but the game is worth the candle. Let’s look at a few of the most popular options:
1. FHA loans allow low income and as little as 3.5% down payment.
Federal Housing Administration (FHA) loan program is a government-backed loan type that helps low-income individuals purchase a home. Among the highlights:
- 3.5% down payment (could come from down payment gift money)
- Closing costs might be paid by the seller.
- Allows lower credit scores than conventional financing.
- No extra money in the bank after closing the loan is required.
- Possibility to use a co-signer (another party who contributes to the loan repayment but will not live in the house).
2. USDA loans for low-income buyers in rural and suburban areas.
The U.S. Department of Agriculture (USDA) loan allows to purchase a home with zero down payment. It is available for properties in areas that are rural, although suburban areas are among them. To see if the location in which you have chosen a home is in an area with an opportunity for this type of mortgage, check USDA’s property eligibility map.
The main advantage of this program is that you can buy a house at a low-interest rate with little or nothing out of pocket. The USDA created for:
- People who do not already own an adequate home.
- Those who make 115% or less of the area’s median income.
3. VA loans offers a zero-down option for veterans and service members
Veteran Administration (VA) loans designed for those who have US military experience and gives lots of preferences:
- Requires zero down payment.
- Closing costs might be paid by the seller.
- No mortgage insurance (means you can buy more home with less monthly income compared to other loan types).
To be eligible, you must comply with the requirements, check US Department of Veterans Affairs list
4. HomeReady or Home Possible conforming loans with just 3% down payments.
The Fannie Mae HomeReady and Freddie Mac Home Possible programs are extremely flexible on sources of income. Here are the main highlights:
- 3.5% down payment (could come from down payment gift money)
- Allows to use the income of household members who are not on the loan as a compensating factor (means your family member who does not want to be on the loan can still help you qualify).
- Allows to use boarder and roommate income, rental income from a basement apartment, and non-occupant co-borrower income to qualify.
All above mentioned option will give you an opportunity to become a home owner without saving traditional 20% of the home’s price for a down payment, get an attractive mortgage rate and most importantly – easily repay the loan in monthly installments.
Should you be interested into low-income home loans please do not hesitate to contact us for more information and get the best mortgage terms available.
