Low Income Home Loans
Information on getting home loans for
low income families.
If you are a low income person or family looking for a home loan, there are many
questions that you will likely have. Most states have housing agencies that
provide programs for low income home loans. Some states also provide
down payment assistance grants. By
contacting these state agencies, you'll find answers to
just about all of your questions, including questions about getting a first
time home buyer loan.
Lender For Low Income Home Loans
Unfortunately, some lenders do not like
to work with low income borrowers,
and prefer instead to only provide mortgages to people who have
above average income.
When searching for a mortgage lender, it is important to
find one that eagerly works with low income families and individuals.
It is highly recommended the you get pre-qualified for a mortgage
before you make an offer on any home. This will have two very powerful
advantages: first, you will know how much you can afford to pay for your
home, and second, it will give you a very powerful edge in negotiating the best
price for that home. The seller will know that you are a serious buyer and that
your loan will close more quickly. Often a seller will reduce the price in
exchange for a quick closing.
Applicants for low income home loans must have very low-, low- or
moderate incomes. Very low-income is defined as below 50 percent of the area
median income (AMI), low-income describes an income between 50 and 80 percent of
AMI; moderate income is a household income below 115 percent of AMI. In some
instances, families must be without adequate housing, but able to afford the
housing payments, including principal, interest, taxes, and insurance (PITI).
Qualifying repayment ratios are 29 percent for PITI to 41 percent for total
debt. In addition, applicants must be unable to obtain credit elsewhere, yet
have an acceptable credit history.
Be advised you should also visit the
First Time Home Buyer Grants
page for information on down payment
assistance that can help you qualify for low income home loans.