How to Successfully Buy a Home on a Single-Income
As a single-parent, diving into homeownership can seem like a daunting process, especially if you’re providing on a single-income. But, with the right knowledge and resources, single parents can reach their goal of homeownership.
If you feel you’re ready to buy a house, here are a few tips to help you get started on your journey to homeownership:
1. Apply for an FHA Loan:
FHA loans are great options for single-parents as they are one of the most affordable loan options. FHA loans only require you to have a 3.5% down payment, so long as your credit score is at or above 580. Because of the lower minimum requirements, it takes the ease off of single-parents who don’t have a two-person household to help boost their eligibility.
2. Look into IDA’s
Individual Development Accounts (IDA’s) are accounts used to help those with low income save for big financial milestones, like purchasing a home. These programs are typically government-funded and work by matching a percentage of your deposit. Every time you put money into your savings account, your IDA program will match that amount. These accounts do have specific requirements in order to qualify.
4. Look Into State-Level Affordability Programs
Each state has different programs available for homebuyers, which can be extremely helpful for single-parents looking for a little more assistance. These types of programs are funded by the Department of Housing and Urban Development (HUD) and offer grants, down payment assistance, help with closing costs, and even access to financial advisors to help you with all of your home buying and mortgage questions.
The state of Michigan has the MI Home Loan Program, which offers first-time homebuyers down payment assistance up to $7,500. Household income limits, minimum credit score requirements, and sales price limits are applicable.
Buying a home doesn’t have to be a difficult process. With the right information, you can successfully buy a home even on a single-income. For more tips on how to buy a home as a single-parent, check out the visual created by FHA Loans below: