Making sure their children grow up in a safe and healthy environment is a priority for many people â including single parents. If youâre a single parent looking to buy a home for your family, considerations like finding the best home loan option are well worth your time and attention.
While there are no âsingle parent home loansâ designed specifically for single parents, plenty of resources are available to help you overcome common barriers like low income or poor credit. If youâre a single parent looking to make your dream of homeownership a reality, you can do it!
Letâs take a look at some ways to approach getting a home loan as a single parent â from how to get started to the types of loans that might work best.
Buying a home as a low income single mom can seem like an impossible dream. With just one income to rely on and other expenses like childcare to factor in, saving up enough for a down payment and qualifying for a mortgage may seem out of reach. However, there are many programs and resources available to help make homeownership attainable for low income single moms.
As a low income single mom myself, I understand the struggles involved in trying to provide the best life possible for your children. Growing up, I dreamed of having a home of my own that I could fill with love and happy memories. It took a lot of hard work, budgeting, and research, but I was finally able to buy my first home last year using an affordable mortgage program for low income borrowers.
Now, I want to share what I learned with other single moms hoping to realize their dreams of homeownership. While it can be challenging it is possible with preparation persistence, and taking advantage of the assistance programs out there.
Why Buying A Home Matters
Owning your own home provides many benefits beyond just having an affordable monthly housing payment. It also
- Gives your family long-term stability and security
- Allows you to build equity as you pay down the mortgage
- Provides the freedom to customize your living space
- Sets a positive example for your children
- Opens up access to better school districts
- Enables you to stop paying rent and start investing in your future
As a mother, being able to provide this type of stable environment for your kids is priceless. Plus, purchasing a home is a valuable long-term financial investment.
Home Loan Options For Low Income Borrowers
The first step is understanding the types of mortgage programs available to low income buyers. While you won’t find loans aimed solely at single moms, there are several options designed for low to moderate income borrowers that single parents can utilize.
Here are some top choices:
FHA Loans
FHA loans are backed by the Federal Housing Administration and feature low down payments and flexible credit requirements. You can qualify with a minimum credit score of 580 and down payment as low as 3.5%. FHA loans do require you to pay mortgage insurance.
USDA Loans
USDA loans are guaranteed by the U.S. Department of Agriculture for low to moderate income buyers in designated rural and suburban areas. Eligible borrowers can receive 100% financing. Credit scores generally need to be 640 or higher.
State and Local Programs
Check with your state and local housing agencies about special mortgage or down payment assistance programs for low income buyers in your area. These programs are specifically tailored for residents.
Single Family Home Loan Program
Offered in select areas through non-profit organizations, these programs provide affordable financing to help low income families buy a home.
Community Land Trust Home Loans
CLTs offer homes for below market value prices. In return, you agrees to limits on appreciation when you sell so the home remains affordable for the next buyer.
Down Payment Assistance Programs
The biggest roadblock for many low income buyers is saving enough for the required down payment. But numerous programs exist to help with this expense.
I was able to tap into down payment assistance which allowed me to buy my home with less than $2,000 out of pocket. Here are some options to explore:
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Federal Home Loan Bank – Offered through participating lenders, the FHLB gives grants ranging from $2k – $22k based on income.
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State/Local Down Payment Help – As mentioned above, state and local governments often administer DPA programs. These are an awesome resource.
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VA Loans – Veterans Affairs mortgages require no down payment for eligible borrowers.
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USDA Rural Development Loans – Again, Rural Development mortgages through USDA require zero down payment.
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Non-Profit Programs – Organizations like Habitat for Humanity and NeighborWorks provide down payment assistance in certain areas.
Shop around and see what’s available in your state and city. The help is out there if you search for it.
Strategies To Qualify For Home Loans As A Low Income Single Mom
Beyond finding the right mortgage program, you’ll need to ensure you meet the loan requirements. This means looking at your credit, debt, and financial situation objectively.
Follow these tips to put yourself in the best position possible to qualify:
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Reduce debt – Lenders look closely at your debt-to-income ratio. Pay down credit cards, auto loans, student loans, and other debts.
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Check your credit – Aim for a credit score over 640. Review your reports and correct any errors.
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Save up – Build savings for move-in costs and emergencies. Shoot for at least 3 months of living expenses.
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Limit new credit – Don’t open new credit cards or loans when applying for a mortgage. Wait until after you close.
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Show additional income – Provide proof of child support, alimony, social security or other income sources.
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Get pre-qualified – Talk to a lender early and get pre-qualified so you know your budget.
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Consider a co-signer – Asking a family member to co-sign can help if you fall slightly short.
With preparation and persistence, single moms can absolutely achieve homeownership. I’m proof it is possible, and you can do it too!
Finding The Right Home Loan Program
Navigating the variety of home loan programs and choosing the right one can feel overwhelming. Here is a step-by-step guide on how to approach the process:
Step 1: Define Your Home Buying Goals
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Determine your ideal location, home size, timeline for buying, and must-have features. Outline your wish list.
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Set a target budget range based on your income, savings and projected expenses.
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Research home values in your desired areas to set realistic expectations.
Step 2: Check Your Finances
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Review your credit score and reports for any issues to address.
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Calculate your monthly debts and expenses. Be honest about what you can afford.
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Look at your current savings and plan how much you can save monthly towards a down payment.
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Gather documents for income, bank statements, debts, child support, etc.
Step 3: Identify Available Programs
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Search for state, local and non-profit down payment assistance programs.
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Research special mortgage and grant options in your state and city.
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Ask housing counselors and financial advisors for guidance.
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Consider FHA, USDA, VA, FHLB and other programs for low income buyers.
Step 4: Connect With a Lender
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Interview several lenders familiar with low income buyer programs.
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Get pre-qualified so you understand your preliminary financing options.
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Ask lenders to explain available grants, loans, and terms thoroughly.
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Choose a lender you trust to find the optimal program for you.
Step 5: Submit Your Application
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Work closely with your lender to complete the application accurately.
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Provide all required documentation to verify income, savings, debts, child support, etc.
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Get pre-approved once your application is complete.
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Stick to your normal spending and pay all bills on time while the loan is processed.
With the right lender and program, you can make affordable homeownership a reality, even as a low income single mom. Stay determined!
Low Income Single Moms Home Loan Success Stories
Reading about other single moms who achieved homeownership could inspire and motivate you on your own journey. Here are a few real life examples of low income single mothers who found mortgage programs that worked for them:
Sarah D. – A single mom supporting two kids on $32k annual income. She used an FHA loan along with down payment help from her state to purchase a $152k condo with just $1,500 out of pocket.
Michelle W. – A divorced mother earning $26k per year. Michelle qualified for a USDA loan with 100% financing to buy a $110k home located in a rural area just outside the city.
Emily S. – A widowed mom with twin daughters who buys a $180k Habitat for Humanity home. She provided 300 sweat equity hours and qualified for their affordable financing program.
Tanya J. – A hard working single mom able to buy her first home through Fannie Mae’s HomeReady mortgage, requiring only a 3% down payment and including reduced mortgage insurance.
As you can see, affordable home loans tailored for low income buyers made it possible for each of these single moms to finally realize their dreams of homeownership. Their stories show that with determination and the right mortgage program, you can do it too!
Expert Tips For Single Moms Seeking Home Loans
To learn more about successfully qualifying for low income buyer mortgage programs, I spoke with Nancy Johnson, a loan officer specializing in affordable lending options. Here are her top tips for single moms:
- “Look into ‘
See What You Qualify For
There are several home loan options available to single parents, each with its own benefits. These range from a lower down payment or credit score minimum to a better interest rate.
Research your options and see what loan may be best for you. Itâs also a great idea to contact lenders to see what you may qualify for. Lenders may be able to offer assistance programs or discounts if you work with them directly.
FHA loans are backed by the Federal Housing Administration (FHA) and are often best for low-income borrowers. These loans come with a relatively low interest rate, a low down payment requirement (only 3.5% with a credit score of 580 or higher) and are available to those with a credit score as low as 500.
One downside to an FHA loan is the mortgage insurance premium (MIP), which youâll owe for at least the first 11 years of loan payments. You can avoid paying MIP for the life of the loan by making at least a 10% down payment.
Pros |
Cons |
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Low interest rates |
Higher mortgage insurance rates |
Only 3.5% required for a down payment if the borrower has a 580 or higher credit score |
Mortgage insurance payments for at least 11 years and possibly the life of the loan |
Availability with a credit score as low as 500 |
Loans with a 500 â 579 credit score require a 10% down payment |
Lower income requirements |
Home must meet FHA standards |
If youâre an active member or veteran of the U.S. military, or an eligible surviving spouse, a VA loan could be your best option for homeownership. VA loans are backed by the Department of Veterans Affairs and donât require a down payment or mortgage insurance. This means you can buy a home with little to no savings.
VA loans require a one-time funding fee of 2.15% of the total amount borrowed. The VA funding fee is waived for disabled veterans.
Pros |
Cons |
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Low interest rates |
Availability thatâs limited to qualifying active-duty military members or veterans, or surviving spouses with 100% entitlement |
No down payment |
VA funding fee |
A flexible credit score requirement |
Availability for primary residences only |
No mortgage insurance  |
Restrictions on type of property |
Lower income requirements |
Home must meet VAâs minimum property requirements |
Backed by the U.S. Department of Agriculture, USDA loans encourage borrowers to purchase homes in rural areas. âRural areasâ may make you think about living in the middle of nowhere, but thatâs not always the case. Many qualifying areas surround popular, urbanized cities.
USDA loans have no down payment requirement and relatively low interest rates. Consequently, these loans can be a great option for single mothers. USDA loans do have income caps, so check with your lender to see if your income meets qualifications.
You wonât pay mortgage insurance with USDA loans, but youâll pay a guarantee fee upfront and annually for the life of the loan. The only way to remove this fee is by refinancing or selling the home.
Pros |
Cons |
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Low interest rates |
Availability only in qualifying âruralâ areas |
No down payment requirement |
Income caps that prevent higher earners from qualifying |
A guarantee fee thatâs lower than PMI fees on conventional loans |
A 620 minimum credit score is typically required |
Lower income requirements |
Guarantee fees remaining until the home is refinanced or sold |
Conventional loans are best for salaried or consistent earners with good credit and some savings. Conventional loans can offer down payments as low as 3%, and they often close faster than FHA loans and offer higher loan limits.
Pros |
Cons |
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Down payments as low as 3% |
A 620 minimum credit score |
Relatively high loan limits |
Higher income requirements |
Mortgage insurance becoming avoidable by putting 20% down or reaching 20% equity |
Mortgage insurance requirement with any down payment of less than 20% |
Homeownership For Public Housing Residents
If youâre a public housing resident, you may qualify for HUDâs Homeownership for Public Housing Residents program where public housing authorities may sell their units to residents and other low-income families in the community. This program isnât available in every state, so check with your local public housing agency (PHA) for details.
Government Grants is a private resource not backed by the government that links out to relevant housing grants. It helps users find and apply to grants related to:
- First-time home buyers
- Mobile homes/parks
- Rental housing projects
- Commercial property
- Apartment buildings
- Land development
- RV parks
- New construction
Single Parent Home Loans
FAQ
What is the best home loan for a single mother?
What assistance is available for single mothers in Illinois?
Can I get money for being a single mom?
What are the best low-income loans for single parents?
The best low-income loans for single parents vary based on your situation and prospective property. An FHA, VA or USDA loan could be a great option. The best home loans for single parents with a credit score below 620 may be FHA or VA loans.
How can a single mom get a home loan?
Single moms can consider various programs like FHA loans, VA loans, and USDA loans, which often have more lenient eligibility requirements. Additionally, many states and local governments offer special grant and assistance programs tailored to help single moms and other low-income individuals achieve homeownership.
Are there mortgage assistance programs for single mothers?
Fortunately, for single mothers who have a Fannie Mae home loan, there are mortgage assistance programs such as forbearance or loan modification. Use the Fannie Mae lookup tool to search for options.
What are the best types of home loans for Single Moms & Dads?
Here are some of the best types of home loans for single moms and dads: FHA loan. FHA loans are backed by the Federal Housing Administration and are a good option for low-income borrowers with bad credit. If you have a credit score of 580 or higher, you can qualify with a down payment as low as 3.5%.