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.
Being a single parent is tough enough without having to worry about providing a stable home for your family. But the reality is, homeownership has huge benefits for single moms and their children. The challenge lies in actually qualifying for a mortgage loan and buying a home as a single mother.
The good news is, there are specialized mortgage programs, grants, and other resources tailored to single moms. With proper planning and research, single mothers can break down the barriers to homeownership. This article provides tips and information on the best mortgage loans and assistance programs for single mothers looking to buy their first home.
Challenges Single Moms Face When Buying a Home
While any first-time buyer faces hurdles in purchasing their first home, statistics show single mothers have additional difficulties:
-
Affording a down payment Single incomes mean less cash savings for a down payment The median down payment for single female buyers is 7% versus 11% for married couples
-
Qualifying for a mortgage Single moms often have higher debt-to-income ratios, lower credit scores, and less cash reserves. This makes it harder to meet mortgage approval requirements.
-
Competing in bidding wars Single mothers often lose out to buyers able to pay cash or waive contingencies during bidding wars in hot housing markets.
-
Finding an affordable home: Rising home prices and low housing inventory make it tough for single moms shopping on a budget to find a home they can afford.
The good news? There are specialized loans and down payment assistance programs designed to help single mothers overcome these homebuying hurdles.
Top Mortgage Programs for Single Moms
Single moms have several mortgage options that only require low down payments and have flexible credit and income requirements:
1. FHA loans
FHA loans are government-backed mortgages popular with first-time buyers. Pros for single moms:
- Minimum down payment of just 3.5%
- Lenient credit score requirements – 580 FICO score or higher
- Low debt-to-income ratio allowed
- Down payment gifts accepted from family/friends
The one drawback is FHA loans require mortgage insurance for the life of the loan. But the low down payment and flexible requirements make this a top choice for single mothers.
2. VA loans
If eligible through military service, VA loans are a superb single mom option. Benefits include:
- Zero down payment required
- No mortgage insurance
- Competitive interest rates
- Gift funds can pay closing costs
- No cap on seller contributions
Surviving spouses or parents of deceased/disabled veterans may also be eligible.
3. USDA loans
For moderate income single moms buying in designated rural areas, USDA loans offer big perks:
- 100% financing – no down payment
- Below market interest rates
- Low mortgage insurance costs
- Lenient credit score requirements
- No limit on seller contributions
Check your eligibility even if you’re in the suburbs, as more areas qualify as rural than you may think.
4. Down payment assistance programs
State and local down payment assistance programs provide grants, loans, or tax credits to cover all or part of your required down payment. Often that assistance is 0% interest and forgivable.
Single moms should check out programs in their local area, as many have income limits to qualify. Down payment help from family gifts, non-profits, and employer programs may also be options. The key is eliminating cash required upfront through these aid programs.
Tips for Single Moms Buying a Home
Beyond picking the right mortgage program, here are tips to boost your homebuying success as a single mother:
-
Attend homebuyer education classes – Many aid programs require these, but they also help you understand the buying process.
-
Get prequalified – Shop with a verified preapproval letter stating the loan amount you qualify for.
-
Consider low-maintenance homes – Opt for newer construction requiring fewer repairs if money is tight.
-
Make a competitive offer – Consider writing a heartfelt letter to appeal to sellers.
-
Take advantage of bidding incentives – First-time buyer and military programs can help edge out other buyers.
-
Find a great real estate agent – Look for one experienced helping single moms and first-time buyers. Ask for referrals from friends and family.
-
Lean on local housing authorities – They understand available aid options and can point you to the best programs.
-
Improve your credit – Work on paying down debts and disputing errors to boost your score before applying.
With preparation and perseverance, single mothers can make homeownership a reality even on a limited budget. Seek out every possible assistance program, choose the right mortgage product for your situation, and work closely with a supportive real estate agent and lender.
Frequently Asked Questions About Single Mom Home Loans
What types of mortgages help single moms buy homes?
FHA loans, VA loans, and USDA loans offer the lowest down payments and most flexible credit requirements that can assist single parent homebuyers. Conventional 97 loans with just 3% down are another option, if buyers meet stricter income and credit standards.
Do mortgage lenders look at child support income?
Yes, lenders can count court-ordered child support as part of your stable monthly income when qualifying for a home loan. You’ll need to provide documentation proving you’ve received regular payments for the last 6-12 months which are set to continue for at least three more years.
What credit score is needed to buy a house as a single mom?
Requirements vary by the type of mortgage, but single moms can generally qualify with credit scores as low as 580 for FHA loans or 620 for conventional loans. Scores of 700+ will get the best rates. Building credit via on-time payments before applying is key.
How can a single mom afford a down payment?
Beyond mortgage programs needing only 3-3.5% down, single moms should look into down payment assistance gifts, loans, and grants from employers, housing agencies, and non-profits. Many special aid programs help cover most or all of the required down payment.
What help can single moms get when buying a house?
First and foremost, connect with your state or local housing authority to find state/city programs assisting single parent homebuyers. Also look into employer and charitable down payment gifts, grants from housing non-profits, and no-interest second mortgages that help fund your required down payment.
Can I buy a house on one income?
Yes, single income buyers can absolutely qualify for a mortgage, as long as your income meets the lender’s minimum, typically based on your debt-to-income ratio. Using one of the low down payment programs above is key. Documented additional income like child support helps demonstrate you can afford the monthly payment.
The most important takeaway is that with proper planning, research, and persistence, single moms can achieve the dream of homeownership for their families. Tap into the many resources and aid programs for single parent homebuyers in your area. Partner with an experienced real estate agent and lender who can walk you through the process from start to finish. You’ve got this!
Single Parent Down Payment Assistance
Down payment assistance (DPA) programs vary widely by region. Most DPA programs are offered at the local, state or county level. Many DPAs are offered through local nonprofit organizations that have programs specifically designed for their communities.
DPA programs can provide assistance through:
- Grants: Money that doesnât need to be repaid.
- Loans: Second mortgages used to convert down payments into monthly payments.
- Deferred loans: Second mortgages (as above) that only need to be paid when you move, sell or refinance, depending on the terms.
- Forgivable loans: Second mortgages that are forgiven after a set time period, such as 5 years.
Because DPA programs vary so widely from region to region, itâs often best to contact your local HUD authority to see what programs are available. Itâs also important to note that not all lenders accept all DPA programs. Itâs best to contact lenders to learn about which programs they accept.
Single Parent First-Time Home Buyer Grants
Every year, the government sets aside funding through the U.S. Department of Housing and Urban Development (HUD) to support housing initiatives for citizens. HUD offers over 20 grants related to housing and homeownership. Apart from national programs, grants can also be available at the state and local government levels.
Although there are no grants specifically for single parents, there are several grants available for first-time home buyers or low-income buyers that may be useful.