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How a Single Parent Can Buy a House

How Can a Single Parent Buy a House? Couples have twice the purchasing power of single home buyers, making it easier for two-income families to purchase a home. However, this does not rule out the possibility of single parents purchasing a home.

Many programs exist to assist single parents in purchasing a home and overcoming obstacles such as a low down payment, a low income, and a short or poor credit history.

While banks cannot discriminate based on marital status, lending requirements make it difficult for single buyers to get a loan.

How a Single Parent Can Buy a House

More single people are resuming home purchases. According to the 2016 profile of house buyers and sellers published by the National Association of Realtors:

  • Married couples made up 66% of recent house buyers.
  • Women made up 17% of the population.
  • 7% of the men were single.
  • Unmarried couples made up 8% of the total.

This is up from 15% of single women buyers in 2015, which was matched for the lowest share since 2002. In 2011, the highest proportion was 18%.

While married couples have the highest income ($99,200), single women buy homes in greater numbers and for less money than single males. Single male buyers made $69,600, while single female buyers made $55,300. Read on to figure out How Can a Single Parent Buy a House.

How Can a Single Parent Buy a House Using a FHA Loan

If you’re a single person trying to purchase a home, whether you have children or not, the first thing you should search for is a home purchasing program that doesn’t require a significant down payment if you have a low to moderate income.

FHA home loans are available to first-time purchasers and those who haven’t bought a house in the last three years. It simply demands a 3.5 percent down payment and does not have any income criteria. For a 96.5 percent loan, a minimum credit score of 580 is necessary, and for a 90 percent loan, a minimum credit score of 500 is required.

The FHA also has a program called Homeowners Armed with Knowledge, or HAWK, that gives people who go through housing counseling a discount on their mortgage insurance.

State and Local Programs that Assist

Low- to moderate-income consumers can benefit from state and municipal government programs. According to an index compiled by Down Payment Resource, the majority of programs are at the local level, with 76 percent of homebuyer assistance programs in a designated area such as a city, county, or neighborhood.

With 380 programs, California leads the way, followed by Florida with 238, Texas with 181, and Maryland with 84.

Homes under the Permanently Affordable program in Boulder, Colo., are offered at a lower price than other homes in the city to make housing more affordable, according to Bob Gordon, a real estate agent with Berkshire Hathaway in Boulder. Gordon believes the program is great for single parents because it allows them to live close to work and school while saving money.

According to Gordon, the average apartment in Boulder costs $500,000, whereas residences in this scheme cost under $200,000. He claims some are raffled out to allow many bids to compete on an equal level rather than first-come, first-served.

What else should you consider when buying a house? Buyers with incomes of 60 to 80 percent of the regional median income are eligible. The residences don’t value in lockstep with the market, but are linked to a 3.5 percent annual increase in the local median salary.

The United States Department of Housing and Urban Development, or HUD, maintains an online database of housing assistance resources, including local programs, in every state. Read on to figure out How Can a Single Parent Buy a House.

What is a Mortgage Credit?

Mortgage Credit Certificates, or MCCs, allow first-time homebuyers to qualify for a higher mortgage by offsetting some of the cost.

MCCs are tax credits that can be used to offset some of the cost of your mortgage interest. They lower your tax liability, allowing you to withhold less tax from your paycheck and pay down your mortgage faster. State and local governments provide them.

Personal Development Accounts (PDAs) (IDAs)
By matching their funds, IDAs assist people with low incomes in saving for a down payment and closing costs.

Savings can begin as low as $25, with a potential match of up to 8:1. A local IDA program can get up to $2,000 in federal matching money.

Most organizations set a limit of no more than 200 percent of the federal poverty level for applicants. In 2016, the median income for a family of four was $24,300.

See Today’s Mortgage Rates.

Discover Your Housing Demographic for Benefits

All of the programs described above are aimed for those with low to moderate incomes who need assistance buying a home. There are niches within that that property buyers may fall into.

Union members, emergency workers, teachers, college graduates, veterans, and rural inhabitants, for example, are eligible for special loans. They don’t give a damn about your gender, color, or marital status.

In rural areas, for example, the Rural Housing Development Loan program provides government-backed loans. In a buyer’s location, income cannot exceed 115 percent of the area median income.

Veterans are eligible for VA loans that do not need a down payment, mortgage insurance, or a minimum credit score.

Housing assistance programs enable community workers afford to live close to their jobs. The Teacher Next Door Program in San Francisco is great for educators. They provide up to $20,000 for down payment and closing costs. This is for teachers earning up to 200 percent of the area median income.

Georgia police officers, firemen, educators, and healthcare workers can claim up to $7,500 in reimbursement. A comparable program exists in Ohio.

When applying for a mortgage as a single parent, child support payments are counted as income.

There are numerous choices available to single parents. Whether it’s local and state programs, FHA assistance, IDAs, or mortgage credit, it’s always a good idea to look into all of your alternatives to ensure you’re receiving the best price.