How to Get Low Income Home Loans
The mortgage market has seen new incentives introduced to stimulate the housing sector with low income loan programs and down-payment assistance. The Federal government has supported mortgages for people with lower incomes. Individuals and families that earn less than the threshold set may be eligible for house buying incentives with home loans for lower income. In years past it was very difficult for lower income households to qualify for house buying but several new initiatives have helped the creation for very low income home loan programs from Fannie Mae, Freddie Mac, CALHFA and the Federal Housing Administration.
At Nationwide Mortgages we help consumers locate lenders that extend low income home loans and down-payment assistance programs for people with all types of credit. Many people are not aware how many resources have been made available to encourage homeownership in the United States.
Did You Know? In fact most renters do not even know that many states have created departments that focus solely on offering first time home buyers education that includes down-payment help for home buyers who make less money than most banks require for mortgages. There is no charge and no fee to shop lenders online.
Does FHA Still Offer Low Income Home Loans?
If you're someone who dreams of owning your own home, it's often easy to assume that you need an exceptional income in order to qualify for a loan. After all, things like credit score and income levels are usually the guiding factors in determining whether or not you're going to receive the mortgage loan you need to buy your home. There are numerous options out there for those with lower incomes, and FHA lending products are a good example of this.
Low income home loans from the FHA are one of the most effective ways to become a homeowner even if you have a low income, and they've been around since 1934. The Federal Housing Administration is a part of the Housing and Urban Development department of the government, and the FHA insures your loan.
That's important to understand. The government itself doesn't actually issue you the loan. Instead, it insures it. This allows the lender you're using to offer you better terms for your loan. In general, there are three huge advantages offered by the lower income home loans from the FHA. They are:
- Lower down payment requirements to make it easier to save the money needed for your loan down payment. In fact, your down payment could end up being just 3.5% of the purchase price of the home – that's a huge reduction in overall down payment requirements.
- Easier qualifying requirements. This includes lower income requirements and less strict credit score requirements – two things that many Americans struggle with when applying for a home loan. While a lower credit score could mean higher interest rates, it won't make it impossible to get the loan you want.
- Lower closing costs to help reduce the added fees and charges many have to pay when buying a home. Many people don't realize just how many of these fees are often added to a home loan, and just how much more expensive they can make it.
In addition to making it easier for you to qualify for a lower income home loan, some of the FHA programs were designed to help people purchase their first house – it's often the path that first time homeowners take. And it's a perfect option for those looking to get a 'fixer upper'. That's because the FHA actually offers a loan that includes the cost of purchasing a home as well as remodeling and repair costs. Those who already own homes but who want to remodel or repair can refinance through FHA, but many homeowners start out with one of these highly effective loans.
Getting a home loan for people with low incomes are not impossible at all, and the FHA is one of the best paths towards the loan you're looking for. Finding the right lender who works with the FHA to offer these loans is the first step towards getting the kind of rates and terms you deserve, and the first step towards getting into the home you may have thought was out of your reach. In other words, the FHA loans are well worth a closer look.