Can I buy a house with low income?
Yes, you can buy a house with a low income by qualifying for low-income home-buying programs and special mortgage loans. This is because there is no minimum income requirement for buying a house.
However, your ability to qualify depends on a variety of factors specific to your financial situation. A mortgage lender will examine your credit score, debt-to-income ratio, and down payment to determine if you qualify.
Verify your home-buying eligibility. Start hereIn this article (Skip to...)
- Buying with with low income
- Low income home buying programs
- Low income home loans
- Eligibility requirements
- Tips for low income buyers
- FAQ
Do you qualify for low-income home loans?
Wondering if you qualify as low income? The U.S. Department of Housing and Urban Development (HUD) says you're low income if your household earns 80% or less of the area median income (AMI). Some loan programs even help borrowers earning up to 100% of the AMI.
Not sure where you fall? Use Fannie Mae’s AMI lookup tool. Plug in your ZIP code to see what counts as low income in your area.
AMI is the midpoint of all incomes in your area: half earn more and half earn less. The Department of Housing and Urban Development (HUD) uses AMI to divide income into brackets.
- Extremely low income: 0%–30% of AMI
- Very low income: 31%–50%
- Low income: 51%–80%
- Moderate income: 81%–120%
- Middle income: 121%–165%
- High income: 165% or more
Family size is also important. Here’s a quick example: if the area median income is $100,000, a household earning up to $80,000 may qualify for low-income home-buying programs. Knowing your income bracket helps you figure out which low-income loan options or down payment assistance programs you might qualify for. It’s the first step in learning how to buy a house with low income.
Check your eligibility for low-income home loans. Start here
Low income home buying programs
Many programs can help people buy a house based on their income. These low-income home-buying programs offer different types of assistance: some lower your monthly mortgage payment, some cover closing costs, and others let you buy a house with no money down.
Each program has different rules and benefits, but all of them make it easier to buy a house with low income.
Review the low-income homebuying programs available to you. Start here| Program | Description | Who Is Eligible |
| HomeReady | Low down payment, flexible sources of funds. | Income limits based on area |
| Home Possible | Low down payment, flexible credit terms. | Income limits based on area |
| Down Payment Assistance | Grants or loans to cover the down payment and closing costs. | Low- to moderate-income families |
| State or Local Assistance | Various grants, loans, or tax credits. | Low- to moderate-income families. |
| Hud Homes | Discounted homes sold by HUD. | Low- to moderate-income families |
| Good Neighbor Next Door | Significant discounts on homes for essential workers and first responders. | Must commit to living in the property as a primary residence for at least 36 months. |
| Mortgage Credit Certificates | Tax credit to reduce federal income tax liability. | First-time home buyers who meet income requirements |
HomeReady and Home Possible
Fannie Mae’s HomeReady and Freddie Mac’s Home Possible are both low-income home loans, but with built-in benefits. Each requires only a 3% down payment that can come from gifts, grants, or other approved sources. Sellers can also cover up to 3% of closing costs. Both offer reduced private mortgage insurance (PMI), which means lower monthly payments than standard conventional mortgages.
HomeReady offers more assistance by allowing you to count income from a renter—if they have lived with you for at least a year—to increase your qualifying income. To qualify, your household income must be under the local income limits, and your credit score needs to be 620 or higher.
State and local down payment assistance programs (DPAs)
DPAs help low-income buyers cover their down payments and closing costs. These programs are run by government agencies, non-profits, and community groups. Most are built for low-income home buyers, and have easier eligibility requirements.
Some even make it possible to obtain a zero-down mortgage depending on the program and where you’re buying.Assistance usually comes as a home-buying grant or a deferred loan, sometimes forgivable if you stay in the home five to ten years. Check our guide to DPAs in every state to find down payment assistance programs near you.
HUD Homes
WHUD homes are properties the Federal Housing Administration (FHA) takes back after foreclosure, and then sells at a discount through a low-income home buying program.
To qualify, you must live in your home as your primary residence for at least 12 months and can’t have purchased another HUD home in the past two years.These homes are sold as is, often need repairs, and are bought through a bidding process. You'll need a HUD-approved real estate agent or mortgage broker to place a bid. To browse listings, visit hudhomestore.com. For program information, check hud.gov.
Good Neighbor Next Door
The Good Neighbor Next Door program helps teachers, police, firefighters, and EMTs buy HUD foreclosure homes at a 50% discount. You can buy a new home with an FHA mortgage with a modest down payment of just $100.
Homes are listed on hud.gov, and bids must pass through a HUD-approved real estate agent. If accepted, the discount becomes a second mortgage with no interest or payments.Live in the home for three years, and the second mortgage is forgiven, which reduces your upfront homeownership cost by half.
Compare low-income home loans with multiple lenders. Start hereMortgage Credit Certificates (MCCs)
Mortgage Credit Certificates (MCCs) offer a tax break that can increase your home-buying budget. If you meet income limits, you may qualify for a tax credit worth a percentage of your mortgage interest. Lenders can factor that credit into qualifying income, which may help you qualify for a larger loan amount. Many states, counties, and cities offer MCCs, but their rules vary. Check with your local housing finance agency to see what’s available and how it can support your path to affordable housing.
Low-income home loans
Even if you don’t qualify for a low-income home-buying program, you still have options. Government-backed loans, such as FHA, VA, and USDA, make homeownership possible for buyers in a range of financial situations. Some even offer a zero-down-payment loan, which means that you can buy a home without saving a large lump sum.Here, we discuss how these mortgage options work and what to expect.
Check your government-backed mortgage eligibility. Start here| Loan Type | Credit Score | Down Payment | Unique Requirements |
| FHA loans | 580 for 3.5% down, 500 for 10% down | 3.5% with a 580+ score, 10% with a 500-579 score | Primary residence required, mortgage insurance necessary |
| VA loans | Varies by lender, often 580+ | No down payment required | Must be a qualifying service member, veteran, or eligible spouse; primary residence only |
| USDA loans | Usually 640 | No down payment required | Must be in a qualifying rural area, income limits apply, primary residence only |
FHA loans
FHA loans, backed by the Federal Housing Administration, help low-income borrowers and first-time buyers qualify with lower credit score requirements and more flexible DTI ratios. You can get approved with a credit score of 580 and put down just 3.5% or go as low as 500 with a 10% down payment. Many FHA lenders accept higher debt-to-income ratios (up to 45%), making this a popular low-down payment mortgage option. This type of mortgage is among the most common choices for buyers figuring out how to buy a house with low income.
Check your FHA loan eligibility. Start hereVA loans
VA loans, backed by the Department of Veterans Affairs, let veterans, active-duty service members, and surviving spouses buy a house with no down payment or mortgage insurance, and 100% financing, even for a refinance. There's no official credit score requirement, although many lenders look for scores between 580 and 620. A one-time funding fee applies, but can be rolled into the loan amount. Sellers can cover up to 4% of the purchase price in closing costs, which means that some people buy a house with no money.
Check your VA loan eligibility. Start hereUSDA loans
USDA loans offer zero-down-payment loans for eligible buyers in rural areas. The standard option, called the USDA Guaranteed Loan, is available through approved lenders and supports buyers earning up to 115% of the area median income (AMI). There's also a Direct Loan Program for very low-income borrowers earning between 50% and 80% of the AMI.Most lenders require a credit score of 640 or higher, and these loans typically have lower interest rates and mortgage insurance costs than do FHA or conventional loans. Use the USDA eligibility map to check if the property and your income qualify.
Check your USDA loan eligibility. Start hereHFA home loans
Housing Finance Agency (HFA) loans are backed by Fannie Mae or Freddie Mac and offered through state and local agencies. Home loans for low-income buyers often come with reduced mortgage insurance, discounted rates, and down payments as low as 3%. A credit score of 620 is typically required, although programs vary by state. Contact your local housing finance authority to see if you qualify for this low-income home buying program.
Manufactured and mobile home loans
Manufactured homes can be financed with many mainstream mortgage options, including FHA, VA, and conventional loans, if the home sits on a permanent foundation and qualifies as real estate. Some programs have stricter terms. For example, HomeReady requires a 5% down payment instead of 3%. Lenders may also limit eligibility based on the home’s age or foundation type. If the home doesn’t qualify as real estate, you may need a personal loan like FHA Title II, though these aren't considered mortgage loans.
How to qualify for a low-income home-buying program
Most low-income home-buying programs follow the same basic rules. If you're trying to figure out how to buy a house with low income, you’ll need to meet certain requirements related to income, credit, and eligibility.
Check your eligibility for a low-income home loan. Start here- Income must fall within the local Area Median Income (AMI) limits
- Must be a first-time home buyer (no ownership in the past three years)
- Minimum credit score of 580, though some programs accept lower with extra steps
- Debt-to-income (DTI) ratio usually must be 43% or lower
- Completion of a HUD-approved homebuyer education course
- Must live in the home as your primary residence
- Must be a legal U.S. resident
If you check these boxes, you may qualify for programs in your area. Reach out to your local housing agency or HUD-approved housing counselor to explore your options.
How to buy a house with low income
Buying a home with a low income and no savings is possible, especially if you qualify for a no-down-payment mortgage. Low-income home loans are built to help people with limited cash become homeowners, without waiting years to save up.
The tips below can help you buy a house with low income. Whether you're using a low-income home loan, down payment assistance program, or zero-down mortgage, the goal is the same: get you into a home you can afford.
Compare low-income home loans. Start here1. Improve your credit score
A higher credit score increases your chances of loan approval and helps you qualify for lower mortgage rates. Check your credit report and work on improving your score by paying down debts and making timely payments.
2. Save for a down payment
Many loan programs require as little as 3% down or no down payment at all. However, you’ll still need to pay closing costs, and may need cash reserves to assure lenders of your ability to make payments.
3. Lower your debt-to-income ratio
Paying down debts, especially high-interest credit card balances, improves your debt-to-income ratio and increases your odds of mortgage approval.
4. Explore first-time home buyer programs
Because of the flexible rules and government support of these programs, lenders can offer lower interest rates and credit score requirements.
5. Create a realistic budget
Owning a home involves ongoing costs like insurance, taxes, and maintenance. Model your budget to include these expenses and start saving accordingly.
6. Consider a co-signer
If you’re on the edge of qualifying, a co-signer can help. Both parties are responsible for payments and share in the home’s equity.
FAQs about low-income home buying programs
Compare low-income home loans. Start hereYes. On $25K a year, you may afford around $580 a month for housing. With a 6% rate and a 3% down payment, you could buy a house worth around $100,000. Talk to home lenders for low-income buyers to get an accurate estimate based on your location and debt.
Yes. USDA and VA loans are low-down payment options, with 0% down if you qualify. FHA loans and grants can help with down payment requirements, which makes it possible to buy a home even if you don’t have savings.
The lowest is 0% through VA or USDA loans. FHA loans require at least 3.5% down, and conventional loans start at 3%. With FHA, you'll pay a mortgage insurance premium (MIP), while conventional loans with less than 20% down require private mortgage insurance (PMI).
Yes. Many state and local programs offer grants to help with down payments or closing costs. These low-income home-buying grants do not have to be repaid as long as you meet the program’s terms, such as staying in the home for a set number of years or using it as your primary residence.
Yes. The government supports the home-buying process for low-income buyers with a range of programs, including special loans, tax credits, and down payment assistance. Some are nationwide, whereas others are specific to states or cities. These programs are especially helpful if you're buying your first home or have limited income.
Programs like FHA, VA, USDA, HomeReady, and Home Possible offer flexible credit rules and low down payments. Some may charge a higher interest rate, but this trade-off is often an easier qualification.
Bank statement loans and other nontraditional options can help. These allow you to show income through deposits, retirement funds, or assets instead of W2s or tax returns.
You rent a home with the option to buy later. A portion of your rent goes toward the future home purchase. It’s helpful if you need time to save or build credit.
No. Most rent-to-own agreements require an upfront option fee, which acts as a small-down payment. This gives you the right to buy the home later.
Ready to take the next step?
Start by comparing low-income home loans from multiple lenders. This helps you find the right fit for your budget and see which low-income home-buying programs you qualify for.
Click the links below to connect with lenders and explore your options today.
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