Being a single mother can be one of the most difficult, yet rewarding, experiences one could have. Making sure ends meet while dedicating time to raising children poses enough challenges on its own. Add to that the desire to be a homeowner and the tasks may feel insurmountable.
But being a single mom doesn’t mean you have to abandon your dream of owning your own home. In fact, there are a variety of home loans for single moms. And additional services are available to make your dream a reality. You just have to know where to look.
Can a Single Mother Buy a House?
For those wondering whether single mom home loans even exist, the answer is a resounding yes. However, it is important to understand that a home loan for a single mother can be more challenging. In fact, since the housing downturn, all single buyers, including single moms, find it harder to qualify for a mortgage.
Lending standards are more restrictive than they were before the last recession. This means single parent home loans may require more from applicants than in years past. Mortgages for single moms may need higher credit scores and stable job histories to show an ability to repay the loan. Additionally, down payment requirements on home loans for single mothers may be higher.
However, there are programs available that are designed to lift financial barriers that may prevent a home loan for a single mother from being approved.
Down Payment Assistance for Single Mom Home Loans
States, counties, and cities all have the ability to offer down payment assistance to potential homebuyers that meet certain criteria. Many of these programs are grants or forgivable loans, meaning that as long as you reach specific milestones, you will not have to repay the funds.
Often, requirements in qualify may include:
- Income restrictions
- Price limits
- Minimum credit score standards
- Status as a first time home buyer
You also might have to purchase a home within a particular location, such as an individual city or county.
Programs of this nature are available in a range of states, counties, and towns. To determine your eligibility, you can often begin your search through your local housing authority. If program offerings are not accessible directly through them, they can often point you in the right direction regarding where to find information. You may also find information about current programs within your state through the U.S. Department of Housing and Urban Development website.
Best Home Loans for Single Mothers
Mortgages come in a variety of forms, each with unique benefits, drawbacks, and restrictions. However, certain mortgage programs will offer advantages in regards to serving as home loans for single moms.
Most mortgage lenders offer more than one type of home loan, so you can explore multiple single mother mortgage options without necessarily having to go to separate banks.
FHA loans are mortgages backed by the Federal Housing Administration (FHA). When examined as a potential single parent home mortgage, FHA loans have the benefit of a lower down payment requirement. At this time, an FHA mortgage only requires a down payment of 3.5 percent. Additionally, credit score requirements might not be as stringent.
However, the mortgage insurance premium, the FHA equivalent of private mortgage insurance (PMI), can be double the amount associated with other loan types. To avoid the mortgage insurance premium, the homebuyer using this home loan for single moms will need a down payment of at least 20 percent. The required down payment can come from your own funds as well as one of the down payment assistance programs mentioned above.
A VA loan is offered at a benefit to veterans through the U.S. Department of Veterans Affairs (VA). These loans require sufficient credit scores, minimum income requirements, and eligibility based on being one of the following:
- A veteran
- A spouse of a veteran
- An eligible beneficiary of a veteran
A veteran’s eligibility is based on minimum active duty service requirements based on the dates of service in the armed forces.
As house loans for single moms, these offer the most benefits as no down payment is required and there is no mortgage insurance regardless of the down payment amount.
USDA loans are supported by the United States Department of Agriculture. These mortgages are for low- to moderate-income individuals, require no down payment, and have lower mortgage insurance than FHA loans. However, these loans can only be used for properties in specific areas.
As single mom home loans, these can be ideal based on their lower interest rates. There are income maximums that restrict eligibility, but most single parents will fall below the limit.
Single mothers can also qualify for conventional loans. These are more standard offerings available through traditional mortgage lenders and typically offer no particular benefits or drawbacks. Minimum credit scores and down payment requirements vary between lenders. Repayment terms can also range from 10 years to 30 years or more.
If you’re a single mom with a strong credit score, a stable income, and a sufficient down payment (including funds received through down payment assistance programs), you may qualify for traditional financing.
Check Your Eligibility
Most eligibility requirements for down payment assistance, home loans and mortgages, and other homebuyer help programs are accessible prior to applying. Examine your current situation and explore which options may be available based on your qualifications. By taking a little time to research what is available, you may find your dream of being a homeowner is actually closer to a reality than you thought. And then you and your children can have a permanent home to call their own.