Is homeownership a possibility for low-income people with disabilities?
As part of the American Recovery and Reinvestment Act of 2009, first-time homebuyers that purchase a home in 2009 can receive a tax credit of $8000. This credit is fully refundable – even if you do not have taxable income!
If ever there were a time for low-income homebuyers, it’s NOW! Home prices are continuing to fall and there are more affordable homes available than ever before.
So, what’s an aspiring homebuyer to do?
Educate Yourself
There is much involved in purchasing a home. It is important to be prepared and understand the process from start to finish.
The US Department of Housing and Urban Development (HUD) has created a comprehensive online Home Buying resource which covers everything from figuring out how much you can afford to making an offer to home insurance.
Check out this resource by visiting HUD online at www.hud.gov/buying/index.cfm.
Check your Credit Score
Your credit score counts for a lot when it comes to being approved for a mortgage loan. While some exceptions apply, typically, if your credit score is lower than 620, a lender will not consider your application for a mortgage.
If your score is lower than 620, action can be taken to improve your score. To learn more, visit myFico online atwww.myfico.com/CreditEducation.
If you have not established a traditional credit record some lenders may also accept non-traditional records. Such records must typically track payments for no less than 12-months and must be supplemented by at least three credit references from your landlord, utility company, cable company, home telephone provider, etc.
Identify Homebuyer Programs
Typically, homebuyers must pay 3% of the purchase price of the home up front. Most states offer a first-time homebuyer program through which they offer down payment assistance via no interest or low interest loans.
Such programs are typically offered via State Housing Finance Agencies. To find your local agency, visit the National Council of State Housing Agencies online at www.ncsha.org/section.cfm/4/39/187.
Identify a Lender
Fannie Mae, via partnerships with various lenders, offers a variety of options for low-income home buyers, including reduced requirements for down payment and closing costs, flexible mortgage terms and payment options, and choices for borrowers with less-than-perfect credit or no traditional credit history.
They also offer a program specifically for individuals with disabilities called HomeChoice.
To learn more and to find a lender that works with Fannie Mae, call 1-800-732-6643.
Start Saving with an Individual Development Account (IDA)
Individual Development Accounts (or IDAs) are special matched savings accounts designed to help low-income individuals and families establish a pattern of regular savings and, ultimately, purchase a productive asset such as a home. IDAs are unique in that every dollar an individual deposits into an IDA is matched.
Special considerations must be taken for individuals receiving SSI or SSDI so it is important that you mention this when opening an IDA.
To learn more about IDAs, visit www.idanetwork.org or call CFED (Corporation for Enterprise Development) at (202) 408-9788.
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