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 house as a single mom can feel like an impossible feat. Raising kids on one income is hard enough without having to save up for a down payment. But there are programs and loans that make homeownership possible for single moms.
As a single mom myself, I know the struggles firsthand. But I also know the joy that comes from providing stability and security for your kids in a home you can call your own.
In this article, I’ll walk through the best loan programs, down payment assistance options, and other ways single moms can get help buying that first home.
Overcoming the Challenges Single Moms Face
Being a single parent comes with financial challenges. According to the Pew Research Center, 21% of children in the U.S. live with one parent. Most of those single parents are moms.
As the sole provider, it can be hard to save up a down payment. The typical down payment is around 7% of the purchase price. On a $250,000 home, that’s $17,500 – money that could go toward daycare, groceries, and other necessities.
And when you’re already strapped for cash, it’s easy to miss payments and damage your credit. Lenders prefer credit scores of at least 620 for conventional loans and 580 for FHA.
But there are solutions. Let’s look at programs that help single moms clear these hurdles.
Down Payment Assistance Programs
The biggest obstacle for most buyers is the down payment. But there are down payment assistance programs (DPAs) across the US that provide grants and low-interest loans to cover it.
These programs are run by state and local governments, non-profits, and employers. They can give out up to $25,000 depending on the area.
To find DPAs in your state, visit the U.S. Department of Housing and Urban Development’s search tool. You can filter by down payment assistance, homebuyer education, and more.
Here are a few DPAs single moms might check out:
- Ohio Housing Finance Agency – Grants up to $7,500
- Florida Housing Opportunities Program – Loans up to $10,000
- Washington Homeownership Resource Center – Loans up to $25,000
Along with the down payment money many programs provide homebuyer education. This helps first-timers understand the process and responsibilities that come with owning a home.
Government-Backed Loan Programs
Certain government-backed loans are designed to help people with limited savings and less-than-perfect credit They make exceptions that give single moms a shot at qualifying
Here are three options worth looking into:
FHA Loans
FHA loans only require 3.5% down and have flexible credit requirements. You can get approved with a 580 FICO score in most cases. Although 10% down is needed if your score is 500-579.
While private mortgage insurance (PMI) goes away eventually on conventional loans, FHA loans require it for the entire loan term. But the low down payment requirement makes it easier to get started.
DPAs can be used for the down payment on FHA loans. And many state and local groups offer FHA-specific DPA options.
VA Loans
If you’re eligible for a VA home loan through your military service or as the surviving spouse of a veteran, this is an amazing option. VA loans don’t require a down payment or monthly mortgage insurance.
Credit and income requirements are also lax. And VA loans come with a funding fee instead of PMI, which can be rolled into the loan amount.
USDA Loans
U.S. Department of Agriculture home loans work well for low- to moderate-income borrowers in rural areas. With no down payment and low mortgage insurance, they’re on par with VA loans.
Income and credit limitations do apply. But for those who qualify, USDA loans offer an accessible path to homeownership.
Tips for Preparing as a Single Mom
Buying a home takes preparation. And financing can get delayed if you don’t have all your ducks in a row. Here are some tips to help the process go smoothly:
Check your credit report – Dispute any errors to maximize your score. Lenders will use the middle score of your reports from Experian, Equifax, and TransUnion.
Get preapproved – Preapproval involves documentation of your income, assets, and debts. This shows sellers you’re ready to buy and locks in a rate.
Limit debts – Lenders look at your total debts in relation to income (DTI). Keep credit card balances low and avoid new accounts while preparing to buy.
Save up – Even minimal down payments and closing costs add up. Start stashing cash and look into employer or community programs that match savings.
Find the right home – Opt for lower-priced homes and negotiate to keep monthly payments affordable as a single parent.
Alternatives Beyond Traditional Loans
Along with government programs, some non-traditional loan options offer more flexibility:
- Manual underwriting looks beyond scores to consider things like rent payment history.
- Non-QM loans don’t adhere to typical debt-to-income rules and allow alternate income sources.
- Portfolio loans are held by the lender instead of sold to investors, providing more room for exceptions.
These programs tend to have higher rates and costs. But they provide options if you don’t qualify through normal channels.
Be Persistent and Seek Help
Don’t get discouraged if your first attempts at securing a mortgage don’t pan out. Keep asking questions and exploring programs in your area. Enlist help from a housing counselor or buyer agent who understands your situation.
With persistence and creativity, single moms can make homeownership happen. My kids and I are grateful every day for the stability our home provides. So don’t lose hope. You can find a way to buy that provides long-term security for your family.
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.
House Hunt For The Future
When it comes time to shop for a house, itâs important to think long-term. Even if home features donât matter now, consider the ones that may matter in the future, such as:
- Number of bedrooms
- School districts
- Emergency services in the area
- Neighborhood
Once you find a home that fits your needs and your future, you can hold onto it for the time it takes to build equity.
Step by Step | Single Mom First Time Home Buyer Tips | Here’s What You Need To Know
FAQ
Is it possible to buy a house as a single mother?
Can I get money for being a single mom?
What is single mom syndrome?
Can Single Moms get a home loan?
All home loans for single moms are also available to all single parents. It’s quite expected that many women, particularly single moms, inquire about home loans. In fact, more than one-third of all home buyers, whether they’re purchasing for the first time or are repeat buyers, mothers or not, are single women. Check your home buying options.
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.
What are the different types of single mother home loans?
There are four main types of single mother home loans. FHA home loans, which are backed by the Federal Housing Administration, are an excellent resource for single mothers seeking homeownership. Here’s a break down of how they work and why they’re beneficial. The first thing to note about FHA loans is their flexibility with credit scores.
Can a single mother afford a mortgage payment?
Home loans will help you to fund the purchase of your home, but you may be wondering how you can afford a mortgage payment, and if help is available. Fortunately, there are mortgage assistance programs for single mothers: If you have a Fannie Mae home loan, you can get mortgage payment help such as forbearance or loan modification.
Can a single woman get a home loan?
Single women were almost twice as likely as single men to be first-time home buyers and over twice as likely to be repeat buyers. Still, getting a home loan while single can potentially present a few challenges, whether you’re a father or a mother. Living on a single income can make saving for a home more difficult.
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.