Single women and mothers often face a unique set of challenges, especially when it comes to buying a new home. With only one income on which to support a family, finding approval for a home mortgage can be trying. Many assistance programs are available to help overcome challenges such as a modest income, short or poor credit history, and a low down payment. If you’re a single woman or a single mother, here are some suggestions to help make you feel empowered about your home purchasing capability.
For single women (mothers or not), the first thing you want to look for is a home buying program that doesn’t require a large down payment. The Federal Housing Authority offers FHA home loans to first-time buyers or people who haven’t owned a home for three years. It requires only a 3.5-percent down payment and doesn’t have an income-eligibility requirement. The FHA also has a program called Homeowners Armed with Knowledge, or HAWK, that offers breaks on mortgage insurance costs for going through housing counseling.
Local & State Programs
State and local government programs are set up to help low- to moderate-income buyers (the state of California has the most programs with 380!). The U.S. Department of Housing and Urban Development, or HUD, has an online directory of housing assistance resources in every state, including local programs.
Find a Fixer-Upper
A growing trend among home buyers with limited means has been buying older properties and reshaping them. HUD 203 (k) loans are designed for buyers who want to tackle a fixer-upper. This special FHA-backed loan considers what the value of the property will be after improvements and allows you to borrow the funds to complete the project as part of your main mortgage. This is one way women can buy less inexpensive homes and make them new, also giving them a much higher valued property at completion.
Individual Development Accounts (IDAs)
IDAs help people with limited incomes save for a down payment and closing costs by matching their savings. The savings can start with as little as $25 and have a match as high as 8:1.
Up to $2,000 in federal matching funds can be added to a local IDA program. There are some limitations: most organizations limit applicants to earning no more than 200 percent of the Federal Poverty Income level.
If you’re a woman dreaming of home ownership, Richmond Neighborhood Housing Services invites you to attend one of our Pre-Purchase Homebuyer Workshops. This class is designed to provide first-time homebuyers with the knowledge to shop for an affordable home, access government-sponsored financial support programs, get the right mortgage product, and learn how to avoid foreclosure. We have a workshop coming up on May 23rd. It’s free! Register here.