As a single parent I know firsthand the challenges of providing a stable home for my child while balancing limited time and financial resources. When I decided to start looking into buying my first home last year, I quickly realized there was a lot I needed to learn about the process. I wanted to share some of that knowledge in hopes it can help other single moms and dads out there trying to give their kids the best possible life.
Understanding Single Parent Home Loans
The first thing I learned is there are no special “single parent home loans” – anyone can qualify for the same mortgage programs, whether you’re single, married, or have five kids The key is finding one that fits your specific financial situation. Here are some top options I discovered
FHA loans – These require just a 3.5% down payment and have flexible credit requirements, making them a popular choice. You do have to pay mortgage insurance until you reach 20% equity.
VA loans – For veterans and active military, VA loans offer 100% financing with no down payment. And they come with lower rates than even conventional loans.
USDA loans – For low-income borrowers in rural areas, USDA loans provide 100% financing too. The eligibility limits are higher than for other programs.
Conventional 97 – Put down just 3% with a conventional loan. You avoid mortgage insurance with an 80/10/10 or 80/15/5 combo loan.
Down payment assistance – Numerous programs offer grants and low-cost loans to cover your down payment. I used one from my state housing agency.
First-time buyer programs – States and cities provide special mortgages, often with discounted rates, for first-time buyers. I qualified for a reduced PMI rate.
Tips for Single Parent Home Loan Success
After getting familiar with the different loan types, I learned several key strategies that helped me ultimately get approved as a single mom. Here are my top tips:
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Leverage other income – Child support, alimony, side jobs, rental income. It all potentially counts toward your qualification.
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Bring on a co-borrower – Adding a family member as a co-borrower links their income/assets to strengthen your application.
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Improve your credit – Aim for a score of at least 620 or better. Pay down debts and dispute any errors.
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Save for a larger down payment – Even a few extra percentage points can help your case tremendously.
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Lower your DTI – Get monthly debts as low as possible to improve this key affordability metric.
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Document steady employment – Lenders want to see reliable income, so stick with one job if possible.
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Explain past issues – Take time to clear up any past credit events like bankruptcy or foreclosure.
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Shop around for rates – Compare multiple lenders to find the very best deal. Pre-approvals are free.
My Journey to Single Parent Homeownership
After months of preparation using the guidance above, I was finally ready to start seriously looking for my new home. I ended up finding a nice little 2-bedroom ranch just a few blocks from my son’s school.
While it needed some cosmetic upgrades, the price was right and it had a big backyard. I was able to negotiate the seller down a bit since it had been on the market for a few months.
My loan process went smoothly thanks to getting pre-approved upfront and having all my financial documentation ready to go. In the end, I qualified for a 3% down conventional loan and also received a $6,000 DPA grant, bringing my out-of-pocket down payment costs to less than $2,500.
Between the grant and a discounted PMI rate from my city’s first-time buyer program, my total closing costs were under $5,000. The first-time homebuyer education course also helped prepare me for what to expect during the process.
Start Your Single Parent Homebuying Journey
In total, it took me about six months from when I first started researching programs and improving my finances to finally moving into my new home. While buying as a single parent can seem daunting, having the right information and guidance makes achieving homeownership very possible.
I encourage any single moms or dads out there to start learning about your options today. And feel free to reach out if you want to hear more about my personal experience – I’m happy to help however I can! Wishing you the best of luck in finding the perfect home for your family.
Down payment assistance programs for single moms
Along with home buyer counseling, down payment and closing cost assistance programs are available in every state and can help single parents become homeowners. Each down payment assistance (DPA) program is different. But they usually provide up to several thousand dollars, or 3%-5% of a home’s purchase price, in assistance.
Down payment assistance generally comes in one of these four forms:
- An outright grant that never has to be repaid
- A forgivable loan, with zero interest and no repayment, that is forgiven over x years, (often 5-10). Once that time’s up, you owe nothing, provided you haven’t sold the home, refinanced, transferred ownership, or paid back your main mortgage
- A deferred loan, also typically with zero interest and no payments. But you have to pay back the full amount when you sell the home, refinance, transfer ownership, or pay back your main mortgage
- A low-interest rate loan (“second mortgage”) that you pay back in equal installments over a set term, often 10 years. This is paid back in parallel with your main mortgage so you have two payments each month
Many programs offer more money or looser guidelines in areas that have been designated for regeneration. So, if you don’t mind buying your first home in a neighborhood that’s currently less desirable (but has prospects), you may be able to move more quickly.
Some state housing agencies also offer mortgage credit certificates or vouchers. This type of housing assistance gives qualifying borrowers a federal income tax credit, even if they take the standard deduction instead of itemizing deductions.
No recent foreclosure or bankruptcy
If you’ve had a foreclosure or bankruptcy, there will typically be a waiting period before you’re eligible for another home loan. The length of this waiting period can vary, depending on the type of loan and lender’s policies, but demonstrating improved financial responsibility can help shorten that time.
Single Parent Home Loans
FAQ
What is the best home loan for single mom?
Is it harder to get a mortgage if you are single?
What is single mom syndrome?
Can single parents get a home loan?
There are a variety of home loans available for single parents, and many come with flexible credit and down payment options. Single parents may be able to take advantage of state, local and federal grant programs that help first-time homebuyers purchase a home.
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.
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.
Are there grants for single parents?
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.