Owning a home is still the quintessential American Dream. Yet for many it can seem unattainable, especially if you have a low income. But don’t fret, a lower income doesn’t necessarily mean you can’t own a home, you just need to find the right loan.
Low Income Home Loan Options
The first thing to determine is what type of loan you may qualify for within your income bracket. The Federal Housing Administration, or FHA is the place to begin. Run by the US HUD department, the FHA is in the business of helping people buy homes, especially those with lower incomes, or less-than-perfect credit. The FHA isn’t a lender, but they help insure the funding risk for a private lender as much as they help protect the home buyer in ways beyond what conventional loans are able to do.
Because loans backed by the FHA also provide low interest rate options and don’t require as much of a down payment, more families with lower incomes are able to qualify and afford a home loan, provided you qualify also as a first-time home buyer.
For definition purposes, a first-time home buyer is someone who hasn’t owned property for a three-year period or has met other criteria such as being a newly single parent who previously owned a home with their former spouse. Various situations apply to qualify as a first-time home buyer.
If you meet the parameters of being a first-time home buyer and your income is low enough to qualify, an FHA backed loan could be ideal for you. There are also state programs available in connection with the FHA/HUD Housing options, such as available through New Jersey. These are worth looking into you may be surprised by what you qualify for.
There are other programs which offer loans for qualified low income home buyers such through the USDA Direct Loan program, and the VA home loan offerings for military service men and women and their families. Another option worth considering if you’re up for a bit of home ownership education is the Fannie Mae HomeReady Mortgage.
These loans are designed for lower income families who just need that extra boost to cross the threshold into home ownership. There’s a requirement to take a Homeowner Education course, which you can do online, to qualify. Getting educated to understand the course of homeownership and all the financial responsibilities that come with it is something that’s good for everyone. With just a bit of extra wok you could qualify for a great loan despite your lower income.
Within the state, New Jersey offers a First-Time Home Buyer Program with down payment assistance and loan options available to qualifying buyers. Also, worth looking into is the $10,000 grant provided through the NJ Home Seeker Program which Atlantic County is a participating county.
When it’s time to buy a home, work with a Realtor® whose expertise can help you find solutions whatever your real estate needs may be. Get the conversation started with Matt Haviland, give him a call today at 609-338-3773 or send him an e-mail. The Haviland Group and Keller Williams Realty are ready to share their expertise and care for all your real estate needs.
Financing for condos with an FHA loan can be challenge. Under the revised guidelines – which took effect Oct. 15, 2019 – an individual condo unit in a building of 10 units or more may be eligible for spot approval if no more than 10% of the units are FHA-insured. So even if a condo is not on the FHA approved list it may still be eligible for FHA financing.
