How To Buy A House With Low Income | 2026

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.

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 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.

HUD homes are sold as-is, often need repairs, and are purchased 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.

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.

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.

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.

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.

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.

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 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.