Home ownership has always been a part of the American Dream. A single mom purchasing her first house is protecting herself against rent increases while creating a tax benefit at the same time. Security can be especially important for a single mother .For many, however, coming up with the down payment can be very difficult, and being approved can require jumping through many hurdles. Here are a few of the programs available that single moms can look to for help in buying a home for the first time.
Federal Housing Administration (FHA)
FHA provides assistance to people who have low incomes or who have had credit trouble in the past. That can be important for single moms trying to establish their own credit. While FHA requires a 3 percent down payment for first-time home buyers, many states have agencies that will provide this down payment assistance. It is usually in the form of a low-cost loan for people who need it. To qualify, applicants will need to provide employment documentation. They also must show that they fall under certain income requirements. These requirements change annually and vary based on the applicant’s household size so it’s important to check on the latest figures.
Though Fannie Mae has gotten some flack during the recession, the organization still does good work. Fannie Mae works in a way similar to the Direct Loans for students program. Fannie Mae home loans are subsidized loans for home buyers, and they are open to first-time home buyers. Single moms may want to go this route if they earn too much money for the other programs but still need help with getting a home loan.
Bridge of Hope
This national organization is a nonprofit that provides down payment assistance to people in need and single mothers are among the people who benefit most from this program. To qualify for Bridge of Hope, applicants will need to prove that they can make regular monthly payments. They also need to prove that they have steady, secure employment. People with good credit histories will do better with this type of organization than with typical loans.
AmeriDream is another nonprofit organization working to provide low-income people with home loans. This organization also works to build affordable neighborhood communities. While the people who live in these homes do need to make the standard monthly payments, the loans often are at much more desirable interest rates. They allow people who are solid income earners, but do not make very much money, to purchase a home in a community that is designed for families with a similar situation.
It can be very helpful for single mothers to be among people with the same financial circumstances in order to receive emotional support, as well as help with childcare. The AmeriDream communities often have green areas and other public spaces in the housing community, which provide a place for children to play.
Habitat for Humanity
A well-known national organization, Habitat for Humanity uses volunteer labor to build homes for people in need. Single moms are common recipients of Habitat homes. The volunteers secure the labor and supplies necessary and provide the future homeowner with a low-cost mortgage loan to cover any costs incurred in the building. Habitat requires that future homeowners participate in the building by donating a certain number of hours to the building project. The Habitat homes are usually completed and ready to move into within a few months. Contact your local chapter to find out about the application process in your area.
Local Charitable Organizations
In addition to these national programs, many states and local governments have their own down payment assistance programs for first-time home-buyers, and single moms can often get special consideration. Local nonprofits – or even builders – also may have program options available.
The key is to do the research required to find these programs and then get applications in swiftly because competition typically is fierce. Don’t give up on saving for your own down payment as you are looking for these home-buying assistance programs. There may come a time when you are able to afford your own down payment even if it takes many years.