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 single mom can seem out of reach. With just one income saving up for a down payment and getting approved for a mortgage may seem impossible. But there are resources out there that can help single moms achieve homeownership. One option is taking advantage of grants specifically for single moms buying a home.
What Are Grants for Single Moms Buying a Home?
Grants are sums of money given by government agencies, nonprofits, or other organizations to help people in certain situations or with specific needs. When it comes to buying a home, grants help cover costs like the down payment and closing costs.
Unlike loans grants do not need to be repaid. This makes them an excellent way for single moms with limited incomes and savings to get help buying their first home.
There are state, local, and national programs that offer grants to single moms and other first-time homebuyers. The key is finding and applying for programs you may qualify for.
Top 8 Single Mom Home Buying Grant Programs
Here are some of the top grant programs single moms can look into when buying their first home:
1. State Housing Finance Agency Grants
Every state has a housing finance agency that offers first-time homebuyer assistance programs. Most states offer grants to cover closing costs and down payments.
For example, the Illinois Housing Development Authority has the SmartBuy program that provides up to $6,000 in down payment help for single moms and other qualified buyers.
2. Federal Home Loan Bank Grants
The Federal Home Loan Bank system offers first-time buyer grants through its member institutions. The amounts and eligibility requirements vary, but these grants can be used for your down payment and closing costs.
3. Local Housing Authority Grants
Check with your local housing authority about first-time homebuyer grant programs. For instance, the Housing Authority of the City of Los Angeles administers grants worth $10,000 or more.
4. Habitat for Humanity Grants
While best known for building homes, Habitat for Humanity also offers grants to help with buying a home. You’ll need to meet income limits and contribute sweat equity.
5. Downpayment Assistance Program Grants
Down payment assistance programs exist in every state. Most offer grants or forgivable loans to single moms and other buyers. Ask your lender about programs in your area.
6. Federal Home Loan Bank Homeownership Set-aside Programs
The FHLB also allocates grant funds to participating lenders to award to home buyers. Ask your mortgage lender if they offer these Set-aside grants.
7. Community Development Block Grants
These HUD grants are given to local governments to provide housing assistance. Some programs help single moms with home buying needs.
8. Mortgage Credit Certificates
State and local governments offer MCCs. You get tax credits equal to a percentage of your mortgage interest, reducing your taxes owed.
Requirements for Single Mom Home Buying Grants
Grant programs have eligibility rules you’ll need to meet:
- Must be a first-time homebuyer
- Income limits, often 80% of area median income
- Minimum credit score requirements, often around 640
- Debt-to-income ratio limits, such as 50%
- Home price caps on the house you buy
- Must contribute a minimum down payment, often 1%
- Must complete homebuyer education course
- Other restrictions may apply
Carefully review the grant program’s rules. Your lender and real estate agent can also advise you on how to qualify.
How to Find and Apply for Grants
Here are some tips on locating and getting single mom homebuyer grants:
- Contact your state housing agency – Ask about first-time buyer grants
- Talk to HUD-approved housing counselors – Get help finding programs
- Meet with lenders – Ask them what grants they offer homebuyers
- Connect with real estate agents – They work with down payment assistance programs
- Research nonprofits – Organizations like Habitat for Humanity provide grants
- Look into employer, military, disability, and tribal programs – Special grants may be available
- Submit grant applications correctly – Follow all instructions to avoid delays or denials
Make sure to apply for grants as early in the home buying process as possible. It can take weeks or months to get approved and receive the funds.
Using Grants with Home Loans
Single moms getting grants can combine that assistance with low down payment mortgage options:
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FHA loans require just 3.5% down and have low credit score requirements. Grants can cover most or all of the down payment.
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VA loans and USDA loans need 0% down for qualified buyers. Grants may be used to pay closing costs.
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Conventional 97 loans ask for 3% down. Grants can help cover the minimum requirement.
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State and local first-time buyer loans offer down payment help. Grants provide added funds.
Talk to your lender about the ideal loan program to pair with any grants for down payment and closing costs you receive as a single mom.
Home Buying Grants Provide Affordability
The bottom line is that grants make buying a home much more affordable for single moms. If you get approved for a $10,000 grant, that’s $10,000 less you have to save up or borrow.
Grants reduce your out-of-pocket and closing costs on a home purchase. And when combined with low down payment mortgage options, they can truly make the difference in purchasing a home as a single mom.
Do your research and apply for every potential grant. With assistance, buying your dream home is possible even on a single income. Don’t let a lack of savings stop you from getting started on the path to homeownership.
Income Considerations: Child Support And Work
Part of applying for a home is income verification. If youâre in a low-income bracket, itâs worth considering how child support can affect your income in a lenderâs eyes. If you receive child support payments from your childâs other parent, this may be used to supplement your qualifying income. The lender just needs to see the documentation that these payments will continue for some time into the future.
On the other hand, if youâre making child support payments that will be ending soon due to a change in your custody arrangements or because your children are getting older, these payments can actually be excluded from your debt-to-income ratio (DTI). This can help you qualify for a higher loan amount.
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 Mom First Time Home Buyer Programs
FAQ
What is the best home loan for single mom?
Can I get money for being a single mom?
How can a single mom buy a house in California?
Can a grant help a single mom buy a house?
Various state and local governments offer grant programs designed to encourage homeownership among specific populations, including single moms and low-income individuals. These grants, which do not need to be repaid, can be used towards down payments, closing costs, or even to reduce the principal of the loan.
How do I get a home loan if I’m a single mom?
As a single mom, there are several options available to help you secure a home loan.While there isn’t an exclusive “home loan for single moms,” various mortgage programs cater to the needs of single parents.
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.
What is a first-time home buyer grant for single moms?
These programs offer assistance from down payments and closing costs to affordable financing and loan forgiveness options. All will require a recent work history. Keep reading for our full list of first-time home buyer grants for single moms.