Everybody has a favorite dream of purchasing their own home. However, under these trying economic times, when people are working hard to make ends meet, transforming your dream into actuality is quite a taxing job. Even though a home mortgage loan may prove to be quite helpful, it’s not easy to obtain the loan with a considerably low monthly income. However, the good news is that, there are lots of home-buying programs for below-average income people. You just need to know where you’ll find it. For low income group people, there are various affordable mortgages and programs close at hand.
Low-income mortgage assistance – 3 different types
Nowadays, there are different kinds of low-income home purchasing programs. They all have one purpose – providing mortgage help, either directly or indirectly.
Mortgage insurance – Here, the federal government indemnifies the mortgage loan provided by a private mortgage lender. This kind of government assistance makes the qualification process easy for borrowers, even when their income level might bar them from getting a conventional home loan. Some good examples are FHA and VA loans.
Direct lending – Under certain circumstances, the government will provide loans directly to low income group borrowers (without taking help of a private lender). An example of this kind of aid is the USDA rural housing program.
Grant programs – Here, the home purchaser is provided with a monetary grant from a government or non-profit agency. For people with low income, this is a good way to purchase a home.
You need to look for the low-income home purchasing plans in your own state too. Almost every state offers some kind of financial aid for local home buyers. At times, it comes in the form of educational counseling. At other times, you get it as direct monetary assistance or grants.
FHA or Federal Housing Administration loans
When you’re looking for low-income mortgage alternatives, consider looking at the FHA programs also. However, this program is not restricted to low income group borrowers. Yes, it’s well tailored for them. The FHA or Federal Housing Administration was created under the National Housing Act of 1934. Loans provided by accredited lenders are insured by the FHA. In case the borrower fails to pay off the loan, the federal government refunds the entire loan amount to the lender.
Rural Housing Loans or USDA
If you reside in a rural area, you might be eligible for a low-income home loan from the USDA or United States Department of Agriculture. This particular housing program is specially planned for individuals having “low” or “very low” income. Very low income group refers to those individuals who earn below 50 percent of the average income for the locality in which they reside. On the other hand, low income group refers to those people whose income is between 50 – 80 percent of the average income.
About the Author
The article has been contributed by Selena Cowell. She is a passionate blogger of real estate and mortgage industry. She writes article on home mortgage & investment, real estate news & financial services. She is in this area since 2005. Selena is also associated with some mortgage & real estates communities.