Disability Income Can Qualify You For A Mortgage Loan
If disability benefits are your primary source of income, your income may be lower than what most lenders normally accept when borrowers apply for a mortgage. When it comes to getting a loan to buy a house, a low income can be a problem as lenders worry about the possibility that you will have to struggle to make the monthly loan payments. But even though getting approved for a home mortgage may not come as easily if you live on disability payments, a mortgage broker can give you more information about the availability of special loan programs for which you may qualify.
Housing Choice Voucher Program
The Department of Housing and Urban Development (HUD) offers housing assistance to low-income individuals, including those with disabilities, through the Section 8 housing choice voucher program. In some situations, if you qualify for a voucher and the public housing agency in your area approves it, you can use the voucher to help make your monthly mortgage payments instead of paying rent.
Habitat for Humanity
Habitat for Humanity is another resource available to help individuals and families secure more affordable loans through no-interest mortgages and low down payment requirements – generally $500 – when purchasing a home. The organization relies on volunteers who help fix up old homes or build new homes for individuals with low incomes. Donated building supplies and materials, as well as the volunteer labor, help keep the cost of the homes lower.
To qualify, prospective homeowners must show need, the ability to make the monthly mortgage payments, and the willingness to contribute 300 to 500 hours of sweat equity. However, if your disability prevents you from contributing your own sweat equity toward the purchase of the home, the Habitat for Humanity program in your community may be willing to be flexible in its usual eligibility requirements.
Fannie Mae Community HomeChoice Program
The Fannie Mae Community HomeChoice Program helps disabled individuals with low to moderate incomes who may not have ideal credit obtain a home mortgage. You also may qualify for this loan option if a family member who is disabled lives with you.
Fannie Mae may approve you for additional loan funds that you can use to make modifications to the home that accommodate a disability.
VA Home Loans
Disabled veterans of the U.S. military may qualify for benefits through the VA Home Loan Guaranty Program. If you have a service-related disability and were discharged before your time in service expired, you may qualify for a mortgage loan guaranteed by the U.S. Department of Veterans Affairs (VA).
To lower the costs associated with buying a home, the VA funding fee is waived for disabled veterans. You can also apply for grants to make home modifications to accommodate your disability; however, the value of a housing accessibility grant cannot exceed more than 50 percent of the total cost of the home, including modifications.
Many states have their own programs to help disabled individuals own a home. Assistance may be in the form of loan programs that offer lower interest rates, special low down payments, or lending programs that qualify disabled individuals with lower incomes and higher debt-to-income and loan-to-value ratios.