Home Financing For Low Income Earners

Home Financing for Low Income

Finding the right home financing for low income earners can be a difficult task. One should however not give up as there are many available options of getting a loan to cover a home. A low income earner should not be discouraged by the fact that they do not have enough money. This is because they can get mortgages that are specifically designed for them.

FHA Home mortgage loan

The Federal Housing Administration (FHA) was created to help low income earners to acquire homes of their own. The FHA is an agency within the United States Department of Housing and Urban Development tasked with ensuring that low income earners get decent housing.

The FHA works by providing home financing for low income earners in two ways. On one hand, the FHA has the family package and on the other hand it has the multi-family package. The family package is meant for those seeking mortgages for smaller houses from one to four units. The family package is however meant for those individuals seeking to buy five or more home units.

Although some individuals may be required to make a down payment of up to 3% of the purchase price, there are others who won’t be asked to make this down payment. The FHA also offers a low interest rate which is lower than the market rate. One is also allowed to pay for the loan for a long time. This means that one does not strain financially to repay the loan.

The VA mortgage loan

Home financing for low income earners may also come from the Veterans Administration. Although the VA home loan works almost in the same way as the FHA loan, the only difference here is that the VA home loan is for veterans only. This means that in order to qualify, one needs an application complete with a certificate that confirms that they are veterans or any other document they may have.

The interest loans for VA loans are also lower than the market rate. The other advantage of the VA loan is that one can confirm automatically if they have been awarded money or not.

Check available programs

For those individuals seeking home financing for low income earners, it is important for them to check for available options in their states. This is because each state has its own ways of assisting low income earners. The websites of the different states should also have information of how to apply for the loans and where to look for help.

The low income earners may also find information on how to reduce their down payment to up to 1% of the purchase price. This is bound to greatly reduce the financial burden of the low income individuals who may need loans.

Low income earners should therefore not worry about where to get financial assistance for the home projects. They should take advantage of the home financing for low income earners and get decent homes for themselves and their families.