Single women accounted for 20% of first-time, and 18% of repeat home buyers in 2021, according to the National Association of Realtors. That same year, a Freddie Mac study found that 58% of single female head of household renters didn’t believe they would be able to afford a home.
Even though the journey to homeownership has its challenges, it is possible for single moms to buy a home with the right knowledge and resources, including steady employment. And home ownership has many benefits, like equity and tax deductions.
Keep reading to discover affordable mortgage loan options and education programs to help single moms with aspirations of homeownership:
How hard is it to buy a house as a single mom?
Let’s face it. If you’re a single mom, it can be hard to buy a home. The most obvious hurdle is your financial situation, since you’ll be buying a house on one income.
And even though the gender pay gap is narrowing, women are still earning less than men according to the U.S. Census Bureau. Women consistently make 30% less in annual income than men, and that number creeps upward as women age.
“Buying a home is never an easy process, and being a single mom makes it more difficult — but not impossible,” says Zackary Smigel, real estate expert and creator of the real estate education program, Real Estate License Wizard.
Smigel, a licensed realtor and mortgage broker, points out that single moms with low incomes can take advantage of home-buying assistance programs.
These programs often have low loan interest rates or offer grants that don’t require repayment.
Check out our post on how to buy a home as a single mom.
How can a single mom afford a house?
When you are ready to buy a home, you have many options to help you become a homeowner.
These are some tips to afford a home as a single mom:
- Search for programs that help you buy a home at a discount like HUD’s Good Neighbor Next Door or through the HUD home inventory.
- If you need down payment or closing cost help, check out programs like The Chenoa Fund and Fannie Mae Community Seconds. Research HUD home buying programs and check with your state housing finance authority (HFA).
- Apply for low-income home loans such as Freddie Mac Home Possible and Fannie Mae HomeReady. You can find these programs by attending home buying seminars, talking to lenders and real estate agents, or searching for “low income mortgages” online.
- Connect with organizations and nonprofits like Habitat for Humanity which builds affordable homes for qualified applicants who are willing to help build the house and can pay a mortgage that does not exceed 30% of the person’s income.
If you have another single friend or family member who is looking to buy a home, you can also discuss pooling your resources to buy one together.
You can also create a housing fund and ask friends and family to contribute to it in lieu of gifts for birthdays and holidays. Sites like GoFundMe make it easy for people to help.
Low-income home loans
There are a lot of home loan options available for low-income households. Learn more about these helpful programs so you can choose the best fit. Ask your preferred lender which programs they offer for creditworthy, low-income borrowers.
1. HomeReady® Mortgage from Fannie Mae
As a borrower, your income must be 80% of the area median income (AMI). You can use the Fannie Mae AMI lookup tool to check your geographic area’s AMI.
You’ll need a minimum 620 credit score to apply, though 680 can unlock better rates. Down payment options are as low as 3% and funding from relatives, grants, and Fannie Mae Community Seconds is allowed. There are no geographic restrictions.
You can get reduced mortgage insurance that cancels when the loan balance falls below 80% of the loan-to-value (LTV) ratio (the amount of the mortgage versus the value of the property). Finally, you must take the Fannie Mae HomeView online course or an approved alternative HUD-approved course to be eligible.
2. FDIC loans via Operation HOPE Home Buyers Program
Operation HOPE Home Buyers Program helps low-income home buyers through FDIC-approved loans, down payment assistance, and first-time buying assistance.
Operation HOPE offers multiple programs to increase financial knowledge in underserved communities. Its first-time home buyer education program provides HUD-certified coaches to guide you through the home loan process.
You’ll get group training as well as one-on-one coaching that extends beyond the classroom. When you are ready to pursue an FDIC loan, your Operation HOPE team will continue to provide support. They can also connect you with other professionals along the way.
3. FHA Home Loan
Check into getting a Federal Housing Administration (FHA) loan, which offers lowered closing costs and down payments. The FHA offers fixed-rate loans available in 15- and 30-year terms nationwide.
Borrowers enjoy low down payments and closing costs. It’s ideal if you have moderate to low income and a low credit score.
With a score of 500 to 579, you'll need a down payment that is 10% of the cost of the home. At 580 or more, you’ll only put 3.5% down.
With an FHA loan, you must pay mortgage insurance, and if you put down less than 10%, you will pay it for the life of the loan.
The property you want to buy must meet FHA eligibility requirements. For example, the FHA loan limit range for homes across the country is $472,030 to $1,089,300. You can check your specific area with this FHA lookup tool.
4. Home Possible® home loan from Freddie Mac
If you’re looking for low income home loans for single mothers, a Freddie Mac Home Possible mortgage could be right for you. With as little as 3% down, you can become a homeowner. To be eligible, your income cannot exceed 80% of the area median income (AMI).
Use the Home Possible Income and Property Eligibility Tool to look up a specific property’s AMI limits.
There are no geographic limits on loan amounts, and you can apply even if you do not have a bad credit score due to lack of credit history (though approval isn’t guaranteed). Mortgage insurance is required on one-unit properties, but once your loan balance is less than 80% of its value, it is no longer required.
5. Fannie Mae
HomePath properties are Fannie Mae-owned homes offered to the public at a discount after the previous owner defaulted on a Fannie Mae-owned mortgage. These mortgages come with low down payments, renovation loan eligibility and closing cost assistance of up to 3% of the home’s purchase price.
6. VA Home Loans
If you are an active duty or reserve member of the armed forces, veteran, or eligible spouse, a VA loan could be the best way to go. If approved, you won’t need to provide a down payment or mortgage insurance. Plus, closing costs are kept to a minimum. There are no loan limits if you can afford the property.
The VA guarantees part of the loan and works with private lenders to offer affordable interest rates. The VA loan is available in every state and tribal lands via the Native American Direct Loan (NADL).
7. USDA Single Family Housing Direct Home Loans
The U.S. Department of Agriculture helps rural borrowers refinance their mortgages. This offer, in response to borrowers who did not have to pay a monthly mortgage because of COVID-19, helps keep payments affordable once they resume.
These direct home loans are available for very low- to low-income borrowers who were approved for a mortgage payment stoppage due to COVID-19. You must meet or fall below the income limits for your area to be eligible. Your credit score is not a factor unless you have substantial federal debt.
8. USDA Single Family Housing Guaranteed Loan Program
The USDA Single Family Housing Guaranteed Loan Program offers a year-round application process. If you live in a rural area, this loan provides a way to purchase or build a home with no money down for qualifying applicants. The program offers 100% financing from approved lenders because it guarantees 90% of the loan.
To be eligible, you cannot exceed 115% of the area median income (AMI). You can use this USDA tool to check eligibility for properties and income. There is no set credit score, but you must show a history of making an effort to repay any debts you have.
9. Habitat for Humanity
Habitat for Humanity fixes up and builds affordable homes. The nonprofit serves 50 states and about 70 countries. If you are willing to take home ownership classes, volunteer at a Habitat ReStore, or help build your own home (or someone else’s), you could be one of the next Habitat homeowners.
To be eligible, you must demonstrate a need to secure safe housing and be able to make affordable monthly payments.
Are there any home buying programs for single moms?
In addition to low-income mortgage loans, there are also home buyer programs for single moms, which can help to find affordable properties and programs that offer mortgage assistance.
Some of these federal, state, and nonprofit home-buying programs also educate you on the home-buying process from beginning to end.
Check out the following resources for single moms:
Department of Housing & Urban Development (HUD)
You buy a home directly through HUD. In fact, a key purpose of HUD is to help more people become homeowners.
HUD properties are lower priced because they are foreclosures or defaulted properties. They are owned by HUD as a result of a foreclosure on an FHA mortgage and are currently available in most states, although inventory changes constantly.
To buy a HUD home:
- Contact your local HUD counseling agency
- Work with a lender to find out how much you can afford
- Choose the right mortgage type based on your circumstances
- Use the HUD inventory list to search for your new home
- Make an offer and prepare for the closing upon acceptance
HUD offers an online homebuyer’s kit that details the homebuying process. If you need help or have questions, you can contact a HUD housing counselor. They offer free or affordable advice to guide you through the process.
Public housing authority
Your state housing authority may have leads on local homeownership programs. Some may be designed especially for single parents. These programs, run by HUD, usually require counseling for prospective homeowners.
For example, under the Section 32 homeownership program, a PHA may sell one or more units in a public housing development to a low-income family. Plus, the PHA can offer Capital Fund assistance to help the family buy the home.
The Capital Fund is administered by the Public Housing Investments (PIH) Office of Capital Improvements. Each year, it awards grants to PHAs so that they can assist prospective homeowners as well as improve and update public housing developments and management systems.
Other options include:
- Choice Neighborhoods Funds
- Rental Assistance Demonstration (RAD)
- Section 8 vouchers for mortgage payments
Find and contact your local housing authority.
The Chenoa Fund
The Chenoa Fund is a government-chartered organization that provides up to 5% down payment assistance for those with a FICO Score of 600 or higher. The financial help can go towards a down payment, closing costs, prepaid items or you may direct funds to all three.
You are eligible for the best pricing if your income is less than 135% of your area’s median income.
The Chenoa Fund offers two options: a 10-year fixed-rate repayable loan or a 30-year forgivable loan. The 30-year loan has a 0% interest rate, requires no monthly payments and is forgivable under these conditions:
- A 3.5% loan is forgivable when you pay your mortgage on time for 36 consecutive months
- A 5% loan is forgivable after you make 120 payments on your primary mortgage.
Community Seconds
Community Seconds is a Fannie Mae-approved second mortgage that allows you to use the funds available from state and local governments as well as housing nonprofits to put together a down payment, get help with closing costs and even complete minor renovations.
Single mom home loans FAQs
Does my state have a homeownership assistance program?
Every state has some type of program to help homeowners — from government programs to private and nonprofit options. To find local help, start with a Google search on “homeowner assistance programs near me” or “first-time home buyer help in (your state).”
Find state-based programs offering assistance with down payments, closing costs, and special financing options.
How can a single mom build a house?
Check with organizations like Habitat for Humanity. They build houses with affordable mortgage terms. You can apply and have a chance to help build your own home.
The FHA and USDA also provide home loans you can use for new construction.
How can a single mom get home loans with bad credit?
If your credit score is bad, you’ll want a home loan that does not require a credit score or has options for low credit scores (less than 600).
For example, VA loans don’t require a minimum credit score or down payment, and FHA loans have options for single moms with a score of at least 500.
Home Possible® home loans from Freddie Mac also don’t require a credit score to apply.
How do I clean up my credit to buy a house?
A good credit score is important for buying a house. Fortunately, there are ways to fix bad credit. Here’s how to build your credit systematically:
- Keep an eye on your credit score and report. Once your score reaches 700 or more, move on to a regular, unsecured credit card — one with no annual fee, a good points system, and other perks that you can now enjoy thanks to a solid credit score!
- Get a co-signer with good credit for a regular credit card. Their good credit will affect your credit.
- Become an authorized user on the credit card of someone with good credit, such as a parent, friend, or mentor.
- Be a good credit user. Keep the total borrowed at 30% or less of the credit limit.
- Make all of your monthly payments on time. The most important factor that makes up your FICO score is your payment history. As a result, you need to make it a priority to make all your monthly bills on time. Learn how to get help with energy assistance costs.
- Dispute inconsistencies and errors on your credit report. If you find errors or downright lies, make sure to dispute them via the formal process offered by the Federal Trade Commission (FTC). You may choose to hire a credit repair company to do this for you.
As your credit score improves, you’ll be able to apply for some of the home loans mentioned earlier in this post.
What is the fastest way to raise your credit score to buy a house?
If you do not have any recent credit history, you can build a good credit history with the credit rating company FICO, within six months.
Tools to quickly raise your credit score now:
- Secured credit cards. A secured credit card requires you to put down a cash deposit to secure your own credit line — and as long as you make regular charges, and regular payments on time, your score will increase quickly.
- Check your credit report and FICO score for free, and see if you qualify for an immediate credit score increase of up to 20 points with Experian Boost, a legit way to boost your score.
Continue reading to learn more on how to build credit fast.
Can I get help with my mortgage if I am a single parent?
Home loans will help you to fund the purchase of your home, but you may be wondering how you can afford a mortgage payment, and if help is available.
Fortunately, there are mortgage assistance programs for single mothers:
- If you have a Fannie Mae home loan, you can get mortgage payment help such as forbearance or loan modification. Use the Fannie Mae lookup tool to search for options.
- If you have a Freddie Mac home loan, you can use this lookup tool to learn about helpful programs to keep you in your home.
- The Homeowner Assistance Fund (HAF) is a federal program that helps homeowners pay their mortgages if they can prove financial loss from COVID-19. The HAF program is closed in Alaska and Florida.
- If you have an FHA loan, HUD offers a list of resources to help you stay in your home if you have trouble making the mortgage payments, such as the Making Home Affordable (MHA) program.
You can also contact your mortgage lender and inquire about foreclosure prevention programs.
Bottom line: Home loans for single mothers are available, along with assistance
There are home loans available for single moms. While loan amounts, interest rates, and fees vary, there is likely an option that will work for your financial situation. Plus, you can get assistance to pay your mortgage through grants, tax credits, and government programs.
Before, during, and after the home buying process, be diligent with your finances, which will help you to build credit or improve your credit score.
Research all options to find mortgage assistance programs that best suit your needs. You can also talk to an HUD housing counselor or enroll in a first-time home buyer class to get more information on assistance programs so you know what to expect as you start the process.
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If you are struggling with money and need financial or other assistance, check out this list of resources:
No matter your income, there are many programs to help single moms achieve homeownership. It can be an uphill battle to ensure you are financially capable of owning a home and making regular payments, but there are many programs available to help you buy a house as a single mom.
Every state has some type of program to help homeowners — from government programs to private and nonprofit options. To find local help, start with a Google search on “homeowner assistance programs near me” or “first-time home buyer help in (your state).”
Check with organizations like Habitat for Humanity. They build houses with affordable mortgage terms. You can apply and have a chance to help build your own home. The FHA and USDA also provide home loans you can use for new construction.
If your credit score is low, you’ll want a home loan that does not require a credit score or has options for low credit scores (less than 600). For example, VA loans don’t require a minimum credit score or down payment, and FHA loans have options for single moms with a score of at least 500. Home Possible® home loans from Freddie Mac also don’t require a credit score to apply.
