To say single mothers have a lot of responsibilities would be the understatement of the century. Often working long hours to make ends meet, single mothers also have to contend with childcare, housework, and everything in between. One of the biggest financial decisions they will make is buying a home. While it can be a daunting task, it is possible to find the best home loans for single mothers. With a little bit of research and some help from experts, you can find a loan that suits your needs and helps you achieve your dreams of homeownership.Verify my mortgage eligibility (Feb 22nd, 2024)
There are many different types of home loans available, and each has its own benefits and drawbacks. It’s important to research all of your options before making a decision. Some of the most popular home loan programs for single mothers include FHA Loans, VA Loans, USDA Loans, and Conventional loans.
FHA loans are backed by the Federal Housing Administration and are often a good option for first-time homebuyers. With lower credit score requirements than other loan programs, they may be able to help you get into a home with a smaller down payment.
The disadvantage of an FHA loan is a mortgage insurance premium (MIP), which is usually more expensive than if you take out a regular loan and remains until you refinance or sell the property. Making at least a 20% down payment will help you avoid this cost.Verify my mortgage eligibility (Feb 22nd, 2024)
If you’re a current or former member of the United States military, or a surviving spouse who is eligible for a Veterans Affairs (VA) loan, this could be your best choice for homeownership. VA loans are guaranteed by the Department of Veterans Affairs and do not require mortgage insurance. This means you can buy a house without having to worry about missing out on any opportunities. The funding fee for VA loans is two and three-quarters percent of the total amount borrowed. Disabled veterans are exempt from paying the VA funding fee.
The U.S. Department of Agriculture (USDA) provides a variety of loans to assist low- and moderate-income individuals in rural regions. However, don’t let the use of “rural” fool you, this also includes many towns outside of major cities.
USDA loans do not require a down payment, have low interest rates, as well as lower mortgage insurance premiums than FHA loans. This makes USDA loans for single moms an excellent choice. Because of income restrictions, USDA loans do have an income limit; check with your lender to see if your income meets requirements.Verify my mortgage eligibility (Feb 22nd, 2024)
USDA guaranteed loans are provided by private lenders in the same way as any other type of mortgage. The USDA also has a Direct Loan program for low-income purchasers, which is similar to subsidized or government loans.
You won’t have to pay mortgage insurance with USDA loans, but you will pay a guarantee fee up front and yearly for the duration of the loan. The only method to get rid of these costs is to refinance or sell the property.
The most popular type of mortgage is the conventional loan. These loans are ideal for salaried or consistent payers with excellent credit and some savings. Conventional loans have low interest rates, typically close faster than FHA loans, and offer larger loan amounts, allowing you to acquire more property.Verify my mortgage eligibility (Feb 22nd, 2024)
Grants to Look Out For
Every year, the United States Department of Housing and Urban Development (HUD) devotes funding to help low-income Americans with their housing needs. HUD provides more than 20 grants in the field of housing and homeownership. Apart from national programs, state and local governments may also provide grants.
- Good Neighbors Next Door – HUD provides a substantial cost reduction of 50% off the list price of the house. An eligible buyer must agree to reside in the property as their primary home for 36 months for this grant.
- National Homebuyers Fund – The NHF has helped over 45,600 families across the country achieve the American Dream of home ownership. NHF offers low-interest mortgage loan rates and Down Payment Assistance (DPA) to both returning and new home buyers through its multi-state single-family financing program.
- Homeownership for Public Housing Residents – HUD helps public housing residents become homeowners. Public Housing Authority (PHA) sells public housing units to their residents and other eligible low-income families in their communities for purposes of homeownership.
Purchasing a home as a single parent can be intimidating, but it is possible. There are several mortgage options available to single parents with poor credit, low income, or little savings. If you want assistance, contact your local HUD office or look at some of our resources for buying a home.Show me today's rates (Feb 22nd, 2024)