Being a mother is not easy. This is a hard, daily job that does not have days off, vacations, or sick days. Once you become a mother, you remain her forever.
But its even harder to be a mother alone. You need to work without the possibility of being unemployed for a couple of months, you can only rely on yourself, and absolutely all the responsibility lies solely on your shoulders.
Every difficulty you face has to be overcome alone. But financial difficulties can help solve a loan. Of course, this is not the kind of support where you simply receive the necessary amount that does not need to be returned. But at least its something that will help you stay on your feet.
Being a single mother is not easy. You have to be both mom and dad, breadwinner caretaker disciplinarian, and more. It can feel overwhelming trying to provide everything your family needs on a single income. When an unexpected expense comes up or you decide it’s time to buy a house, getting approved for a loan may seem impossible.
The good news is there are options, resources, and strategies to help single mothers get the loans they need. I wrote this article as a single mom myself, so I understand the challenges firsthand. My goal is to empower you with information so you can make your dreams of homeownership or handling those surprise bills a reality.
Overcoming Barriers to Getting Approved
As single moms, we face some unique obstacles when trying to qualify for financing. Here are some of the most common barriers and how to tackle them:
Lower Income
Living on one income naturally means you earn less than a dual-income household. Thankfully several loan programs cater specifically to lower earners. Options like FHA USDA, and VA loans consider factors besides income. State and local programs provide aid too.
Lower Credit Scores
If you’ve fallen behind on some bills or have limited credit history, your score may need work. Request your free annual credit reports and review for errors. Pay down balances below 30% of the limit. Ask about credit-builder loans. Time and diligent financial habits will also raise your score.
Small (or No) Down Payment
Lenders prefer a 20% down payment, but many moms don’t have that saved. The good news is you can qualify for conventional loans with as little as 3% down. Government-backed loans like FHA, USDA, and VA allow even lower down payments. Down payment assistance programs exist too.
Being Self-Employed
When you’re self-employed, proving stable income for underwriting is more complex. Make sure to have immaculate records of 1099s, bank statements, and your annual tax returns. This shows lenders you earn consistent income in your business.
Limited Savings and Assets
Even if you have great income, limited reserves make lenders nervous. Aim to have a few months of mortgage payments saved as a cushion. Keep saving consistently, even if only small amounts. Request statements be mailed so you’re not tempted to overspend what’s in your accounts.
Types of Loans a Single Mom Can Get
Now that you know how to overcome those obstacles, let’s discuss loan options. Many mortgages and lending programs cater specifically to the needs of single moms and low-income borrowers. Here are some of your best options:
FHA Loans
FHA loans are government-backed mortgages that offer low down payments (3.5%), lower credit score requirements (as low as 500), and more flexible debt-to-income ratios. You will have to pay mortgage insurance until you reach 20% equity. But FHA loans give single moms a great opportunity for homeownership.
VA Loans
If you’re an eligible veteran, active-duty service member, or surviving spouse, VA loans are your best choice. VA loans require 0% down and have no monthly mortgage insurance. Credit score and income requirements are also flexible. VA loans give the best terms, so use them if you qualify.
USDA Loans
USDA loans help low-income buyers in rural areas. “Rural” includes more areas than you’d think – even suburbs can qualify. USDA loans offer 100% financing, and income caps are higher than other programs. You’ll pay an annual guarantee fee, but it’s lower than mortgage insurance.
Conventional 97
Conventional 97 loans allow a 3% down payment on a conventional mortgage. Requirements are still relatively strict regarding credit scores and income compared to government programs. But conventional loans offer competitive rates and quicker closings.
Down Payment Assistance Programs
State and local down payment assistance provides grants, forgivable loans, or second mortgages to cover your down payment and closing costs. Each program has specific income and credit requirements, but it’s an excellent option. Ask your lender or real estate agent about programs in your area.
Single Mom Grants
Several grant programs like Homes for Heroes and Homes for Single Moms and Dads offer financial assistance and other resources for single mothers. These programs typically operate locally and have an application process. They can help cover your down payment or closing costs.
Habitat for Humanity
While not a loan, Habitat for Humanity builds affordable homes for low-income buyers. You “earn” your home by contributing sweat equity hours helping construct it and other Habitat houses. When complete, Habitat sells the home to you at cost with an affordable mortgage loan.
Tips for Securing a Single Mom Loan
Now that you know your loan options, here are some tips to actually get approved and find the best program for you:
Check your credit – Loan approvals start with good credit. Check your credit reports because correcting errors can raise your scores. Pay down balances and dispute any inaccuracies.
Lower your debt – Lenders look at your total debt payments in relation to income (DTI). Pay off credit cards, cars, student loans, or any other debts you can.
Increase your income – More income means you qualify for a higher loan amount and improves your DTI. Consider taking on side jobs, renting out a room, or asking for a raise at work.
Save for a down payment – Even small savings make a difference. Have some money in the bank before applying for a mortgage. Follow a strict budget and save consistently.
Get preapproved – Being preapproved indicates seriousness to sellers and locks in a rate. Contact multiple lenders and compare preapprovals to find the best loan option.
Understand your options – Research loans like FHA, USDA, and VA. Know what you qualify for based on your income, credit score, and location. An experienced loan officer can explain your options.
Shop around – Don’t go with the first lender you talk to. Compare interest rates, fees, and closing costs to ensure you get the most affordable financing.
Ask about discounts – Many lenders offer discounts for income limits, buying in certain areas, or taking a homebuyer education course. Ask loan officers what discounts you may qualify for.
Consider co-signing – Adding a co-signer with higher income or credit can improve your chances of approval. But make sure you can afford the mortgage on your own in case the co-signer can’t pay.
Be Persistent and Don’t Give Up
As a single mom myself, I know firsthand that perseverance and believing in yourself are so important in reaching your dreams of homeownership and financial security. Don’t let past credit issues, low income, or other obstacles stop you from at least exploring your options. With determination, saving, and the loan programs available, you can absolutely qualify for the financing you need.
I remember after my divorce thinking homeownership would be years away for me. But I didn’t give up. I stuck to a budget, increased my income, and met with lenders to understand my options. In just under a year, I purchased my gorgeous new home thanks to an FHA loan. The pride, security, and stability of owning my own home is the best gift I could ever give my children.
So please, don’t give up. Use this article as motivation to start mapping out your path to better credit, budgeting, and a loan tailored to your situation. You’ve already shown how strong you are by providing for your kids on your own. With that same resolve, you can achieve the dream of homeownership too. Wishing you the absolute best on your journey! You’ve got this mama.
Personal Loan For Single Mothers
A personal loan is a type of loan product that can help at any time. It has quite long terms – from 12 months to 64, which helps, if necessary, to reduce monthly payments, stretching them over time. In addition, a personal loan allows you to borrow between $1,000 and $50,000, so your needs can be covered.
Personal credit is most often unsecured, which eliminates the need for you to risk property by providing it as collateral. Also, personal loans usually have low and fixed interest rates.
The only problem in your path may be a bad credit history. It will make it more difficult to get a personal loan, and they will have to turn to private lenders instead of traditional lenders such as banks or credit unions. They may have higher interest rates, but you will still have a much better chance of getting the funds you need.
Mortgages For Single Mothers
If you need to buy a home, a personal loan is unlikely to help you. For such purposes, there is a mortgage.
A mortgage is a secured loan, meaning the property you buy will act as collateral for the lender. This allows mortgages to have low-interest rates. But you could lose your new home if you dont make monthly payments.
Mortgage terms are as large as the amounts. There are mortgages for five years, 15 years, and even 40 years. Everything will depend on the amount of real estate and the lender you choose.
You need to be prepared for two main things in a mortgage: down payment and underwriting.
A down payment is almost always required when you take out a mortgage. However, its size will depend on the value of the property you have chosen and the lenders conditions. Rare mortgages avoid a down payment, but they have higher interest rates.
The underwriting process when you take out a mortgage is very serious. The lender will check your creditworthiness and credit history inside and out. Perhaps they will check your income, and expenses, equalize your debt-to-income ratio, and look at your past credit relationships under a magnifying glass. This is necessary because, again, mortgage amounts are gigantic, and any lender wants to make sure they dont lose their money.
New $2,000 Grant for Moms & MORE Low Income Financial Assistance
FAQ
Can I get money for being a single mom?
Can you get a loan for being a single mom?
Does Georgia help single mothers?
What is the best home loan for single mom?
Can a single mother buy a home?
Even though less than a third of single mothers own a home, you can be one of the single parents who makes homeownership a reality. Like any home loan, you need to be able to prove you have the income, assets and room in your budget to afford the payments. As a single parent with one income, you may feel like you’re at a disadvantage.
Are there loans for single moms?
The short answer is yes, there are loans for single moms to obtain – but not a specific loan for single moms only. The home loans for single moms are also available to any single parent. It’s no surprise, though, that this question is often asked by women. More than 1/3 of home buyers – repeat or first-time, mother or not – are single women.
Can a single mom get a mortgage?
“It can be tough to support a family on one income. But, if a single mom has decent credit, they could qualify for a mortgage,” says Mark Gundersen, a senior loan officer at Shelter Mortgage Company in Saint Charles, Illinois. If you’re a single mom and looking to buy a home, here are some of the loan programs that might work best for you.
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%.
Where can I get a home loan for a single mother?
The USDA also has loans for homes in rural areas. State and local government programs: Many states and local governments offer down payment assistance programs, some specifically for single mothers. These programs may offer grants, forgivable loans, or low-interest loans to help with down payment and closing costs.
Are single moms more likely to get a home loan?
Compared to their single male counterparts, single women, many of whom are single moms seeking home loans, are nearly twice as likely to buy their first home and over twice as likely to be repeat buyers. However, obtaining home loans for single moms, or for any single parent, can present unique challenges.