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What single moms should know about first-time homebuyer grants

If you’re a single mom, homeownership can be within reach. Even as housing costs climb, the National Association of Realtors has been tracking an upward trend of single women choosing to buy homes. Buying a home on a single income is doable, especially with first-time homebuyer grants and housing programs intended to help individuals with low to moderate incomes.

Are you looking to purchase a home to provide a more permanent place to raise your children or be closer to friends and family? Regardless of the reason, if you’re consistent with your rent payments, have job security and solid credit history, now might be the right time to buy.

What’s the homebuying process for single moms or dads?

In addition to the ten essential steps to becoming a homeowner, follow these tips to learn more about resources that can make the homebuying process easier for single parents.

  • 1. Connect with a housing counselor

    When you’re ready to make the leap from renting to owning, homebuyer education courses can help you prepare. U.S. Department of Housing and Urban Development (HUD) sponsors housing counseling agencies nationwide to provide free or low-cost advice. Counselors will talk through your options based on your financial situation. Because these programs vary by city, county and state, it’s important to reach out to a housing counseling agency in your area.

  • 2. Ask your lender about affordable loans

    While there aren’t specific loans for single moms, there are affordable mortgage programs that may meet your needs and help you qualify on a single income. These programs offer zero or low down payment options and easier qualification requirements.

    • FHA, FNMA HomeReady® and FHLMC Home Possible® mortgages are designed for low-to-moderate income borrowers with less than perfect credit and limited cash for a down payment.
    • USDA loans are for low-to-moderate-income homebuyers and offer 100% financing in rural areas. Also known as the USDA Rural Development Guaranteed Housing Loan Program, this type of loan is available in many suburban areas as well.
    • VA loans provide zero down payment options to eligible members of the U.S. military and surviving spouses. These government-insured loans remove many of the typical up-front and ongoing costs of mortgages. In addition, they don’t require private mortgage insurance (PMI).
  • 3. Delve into down payment assistance

    You don’t have to be a single parent to qualify for down payment assistance. First-time homebuyers and individuals with incomes below area median levels can increase their buying power with a down payment assistance (DPA) program. They are available county-by-county to offer first-time homebuyers relief from the costs of purchasing a home. This assistance is provided as a loan or grant–secured as a lien against the property—and is often forgiven over time.

  • 4. Consider a cosigner

    You’ve probably heard of a cosigner on a student or auto loan. But did you know that you can have a cosigner on a mortgage too? While not all loan programs are eligible for a cosigner, having one may improve your ability to get pre-approved for a mortgage. That’s because a cosigner’s income is included when your lender determines how much house you can afford.

Resources for single moms looking for homebuying grants and housing programs

If you’re a single mom and a first-time homebuyer, you can find help through various homebuying grants and housing programs. They may not be labeled “single mom” or “single parent” programs because they’re designed to help anyone with financial challenges achieve homeownership.

  • Homebuying programs in your state

    A great place to start is by researching the programs sponsored by your state or local government. HUD provides a comprehensive list by state with links to assistance programs, HUD homes for sale and homeownership vouchers.

  • HUD’s special homebuying programs

    In addition to providing mortgage insurance on FHA loans, HUD provides housing support with these special programs:

    • Good Neighbor Next Door (GNND): Through GNND, law enforcement officers, teachers, firefighters and emergency medical technicians may receive a substantial incentive in the form of a discount of 50% from the list price of a home located in a revitalization area. Check the HUD home listings for your state.
    • Homeownership for public housing residents: A Public Housing Authority (PHA) may sell public housing units to their residents and other eligible low-income families in their communities for purposes of homeownership. Contact your local public housing agency for more information.
  • Habitat homeownership

    Since 1976, Habitat for Humanity has helped more than 39 million individuals and families achieve strength, stability and self-reliance through shelter. At Guild Mortgage, we believe in Habitat for Humanity’s vision of a world where everyone has a safe, affordable place to call home. That’s why we’ve partnered with San Diego Habitat since 2014. Guild Mortgage and our employees have contributed thousands of dollars in donations and hundreds of volunteer hours. Anyone can apply to be a Habitat homeowner. If you’re looking for housing help and are willing to be an active participant in building a better home and future for your family, you can learn more about applying with your local Habitat.

According to The Mortgage Reports, your best resources for homebuying help are “your local housing finance agency, your real estate agent, and your loan officer.” Since 1960, Guild Mortgage loan officers have been helping people find the right home loan for their financial situation. So even if you don’t think you’re in a position to buy today, we might be able to help. There are many resources for single moms and dads who need grants or down payment assistance to get into their forever homes.

Let’s start with a conversation to see what might work for you. Find a loan officer near you.

The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.

By |Published On: September 16th, 2022|Categories: Guild Blog, Mortgage 101|Tags: , , |

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About the Author: Guild Mortgage

Founded in 1960 when the modern U.S. mortgage industry was just forming, Guild Mortgage Company is a nationally recognized independent mortgage lender providing residential mortgage products and local in-house origination and servicing. Guild’s collaborative culture and commitment to diversity and inclusion enable it to deliver a personalized experience for each customer. With more than 4,000 employees and over 250 retail branches, Guild has relationships with credit unions, community banks, and other financial institutions and services loans in 49 states and the District of Columbia. Guild’s highly trained loan professionals are experienced in government-sponsored programs such as FHA, VA, USDA, down payment assistance programs and other specialized loan programs. Guild Mortgage Company is a wholly owned subsidiary of Guild Holdings Company, whose shares of Class A common stock trade on the New York Stock Exchange under the symbol GHLD.