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SINGLE MOMS CAN GETHOME LOANS TOO

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Single moms might find it a little harder to get amortgage, but it is not impossible. Even with thetightened credit restrictions of most lenders, manystates have jumped in to make it possible for women toget the loan they need to keep their family safe. Inaddition, many government programs make it easier forpeople with one income to get approved for a loan. Ifyou are raising your children by yourself, do not thinkyou are restricted to renting for the rest of your life. Hereare a few options.

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FHA LoansFHA loans are known for their easier requirements to getapproved. You do not have to have perfect credit orpristine debt-to-income ratios. They look at the wholepicture and decide if you are a good risk. If your creditscore is lower, but you have a good credit history for thelast 12 months, you will be more attractive as a borrower. Ifyou have few assets, yet good credit, you can getapproved and even be eligible to accept a gift for the 3.5%down payment or closing costs that are required. The FHAcan accept riskier borrowers because they are backed bythe government in the face of default on your loan.

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VA LoansIf you served in the military or you are a widow of a spousethat served, you may be eligible or VA loans. These loansrequire no money down and are very lenient on theirlending guidelines. It is one of the most affordable loans onthe market as there are no mortgage insurance orexcessive fees and your credit does not have to beperfect.

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USDA LoansIf you are purchasing a home in a rural area, which isdetermined by the USDA, you can get USDA financing,which offers very attractive terms for single moms. Thisloan also offers the ability to put no money down, but youwill have to pay mortgage insurance. The fees are not ashigh as FHA fees and the requirements to get approvedare even more lenient than FHA loans. Because the USDAis a bit lenient in what they consider “rural” it is worthseeing what areas in your state are eligible to see if youcan find a home in that area for this attractive financingoption.

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State AssistanceMany states are jumping on board and helping singlemoms get the financing they need, in addition to the aboveprograms. For example, Baltimore and Pinellas County,Florida provide housing assistant programs which provideborrowers with loans that give them the down paymentmoney that they need to get into a home. Some states,such as Maine, also offer specific financing for first-timehomebuyers that make the financing attractive and easy toobtain.

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Of course, if you have great income and great credit, youcan apply for a conventional loan, which requires a 3%minimum down payment and will charge PMI in order tohave protection in the face of default of your loan. The bestthing to do is weigh your options. Talk to a lender to seewhat your credit, loan-to-value ratio, and debt-to-incomeratio allow you to obtain. Once you know, then you candetermine which program offers the best rates, lowestprivate mortgage insurance, and most affordable downpayment options. Remember, a mortgage is a loan for thenext probable 30 years; make your decision wisely so thatyou can ensure that you have a program that allows you tostay in your home for the foreseeable future.

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INFORMATION PROVIDED BY:

Justin McHood

Mortgage Commentator

Information Originally Published: 9/26/15

Justin McHood is Americas Mortgage Commentator and hasbeen providing Mortgage commentary for over 10 years.

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