In this post, we’re going to share 6 great mortgage programs that you might not know exist. Having a low income or bad credit score can create major obstacles when purchasing a home, but it doesn’t automatically disqualify you. It’s not easy to save up for a down payment while renting. And it may even be more difficult to maintain a good debt-to-income ratio and credit score.
Luckily, there are several mortgage programs specifically designed to help low-income individuals or families become homeowners. These programs may allow you to buy a home without saving the typical 10 to 20 percent down payment and they can also help you afford the monthly payment once you move in.
Depending on some important factors like your credit score, existing debt, location, and profession, it is likely that you will qualify for a home loan through one of these 6 great mortgage programs.
1. HomeReady Loans
2. Home Possible Loans
3. Good Neighbor Next Door
4. USDA Home Loan
5. Manufactured Housing
Manufactured or mobile homes represent a large portion of available homes in almost every area and they’re affordable. You can find homes for a fraction of the cost of traditional homes which means less money up front and a more affordable monthly payment. Although mobile homes may not appreciate like a traditional home, they are a great option for those with severely limited budgets who want to start their homeownership journey. When looking for these types of homes, make sure that they were built on or after June 15, 1976, as homes built prior to this date do not qualify for traditional financing. There are many different financing options when considering a manufactured home, but if you are looking for the best terms then FHA is the best way to go. The standard FHA guidelines apply only 3.5 percent down and more lenient credit standards.
6. Down Payment Assistance
If you do not qualify for any of the mortgage options listed above, then there may be down payment assistance programs that could benefit you. Assistance can be offered by charities, government agencies, employers, and a number of other sources but government loans and grants are usually the most common. A number of cities, counties, and states offer programs that can help eliminate the painstaking saving process for a down payment. It can be tough to save when you have a low income and these programs can break down the barrier to homeownership for many low-income families or individuals. Click here for a list of programs currently available to Arizona residents.
Although the journey of homeownership can seem long and tiring, there are hundreds of programs across the country just waiting to help you out. Having a low income or bad credit score doesn’t mean you have to give up on your dream of being a homeowner, it just means you have to find a program that works for you and your circumstances.