Home Loans for Single Moms: 2024 Loan Programs and Grants

Understanding home loans for single moms and dads

While there are no exclusive “home loans for single moms,” there are various mortgage programs that cater specifically to the needs of single moms and dads.

These so called single mother home loans could help you get around the problem of lower income when buying a house as a single parent. There are also grants and first-time home buyer programs that can offer money toward your down payment, as well as home buyer education programs and one-on-one counseling to guide you through the process.

All in all, buying a home as a single parent may be easier than you think.

In this article (Skip to...)

• Singles buying homes
• Home loans for single moms
• Single mom grants
• Home buyer programs
• Down payment assistance
• Strategies to help you buy
• FAQ

Are there home loans for single moms available?

Yes, single moms can indeed obtain loans, but there’s no exclusive loan type solely for single moms. All home loans for single moms are also available to all single parents.

It’s quite expected that many women, particularly single moms, inquire about home loans. In fact, more than one-third of all home buyers, whether they’re purchasing for the first time or are repeat buyers, mothers or not, are single women.

According to the 2021 report by the National Association of Realtors (NAR), about 20% of first-time home buyers and 18% of repeat buyers are single women. These statistics highlight the significance of home loans for single moms, placing these women as a prominent demographic in the home buying market, just behind married couples.

Compared to their single male counterparts, single women, many of whom are single moms seeking home loans, are nearly twice as likely to buy their first home and over twice as likely to be repeat buyers.

However, obtaining home loans for single moms, or for any single parent, can present unique challenges. Managing a household on a single income can make saving for a home, and consequently securing home loans for single moms, more demanding. Challenges like affording a down payment and closing costs are common, but assistance programs can provide necessary support.

Types of home loans for single moms

If money’s a little tighter on your single income, you might be looking for a mortgage loan that has looser eligibility requirements. Luckily, many common loan programs are flexible in this regard. Home buyers can choose from a wide range of low and even no-down-payment home loans depending on their needs.

Here are a few of the more common home loans for single moms and dads.

>Related: Basic requirements to buy a house: 6 Must-haves for buyers

Conventional loans (3% down)

Conforming loans are a type of conventional loan that conforms to the rules laid down by Fannie Mae and Freddie Mac. You’ll need a down payment of only 3% of the home purchase price and a credit score of 620 or better. But you’ll have to pay private mortgage insurance (PMI) until you’ve reached 80% home equity.

HomeReady loan program

Due to its low down payment requirement (as low as 3%), flexible income options, reduced mortgage insurance, support for co-borrowers, and homeownership education, Fannie Mae’s HomeReady loan program is excellent for single moms and single parents.

Home Possible loan program

For single parents and single moms, Freddie Mac’s Home Possible loan program is a good option. This program makes homeownership more accessible and affordable for them by requiring a low down payment (as little as 3%), flexible income options, reduced mortgage insurance, support for co-borrowers, and homeownership education.

FHA loans

Backed by the Federal Housing Administration, FHA loans have a low down payment requirement of 3.5%. And at 580, the credit score threshold is lower than with conforming loans. Keep in mind that you’ll pay for mortgage insurance premiums (MIP) until you sell, refinance, or pay the loan amount in full. For this reason, many buyers choose a conforming loan if their credit score is 620 or higher

VA loans

VA loans are only available to veterans, active-duty service members, and eligible surviving spouses, and they come with a variety of benefits. These benefits include a zero down payment option, no continuing mortgage insurance obligation, and lower interest rates than most other mortgage loans.

While the U.S. Department of Veterans Affairs doesn’t specify a credit score requirement for the VA loan, participating lenders typically require minimums that range from 580 to 660. VA mortgages are almost always the best loans for those who are eligible.

USDA loans

USDA loans are backed by the U.S. Department of Agriculture (USDA). No down payment is required. But you must buy in a designated rural area (which includes 97% of America’s landmass) and have an average or below-average income for the place where you want to buy.

You still have to pay mortgage insurance premiums with USDA, but at a lower rate than other types of loans. Expect to need a credit score of 640 or higher. This is a great choice if both you and the home are eligible.

State-run home loan programs

In addition, all states and many cities and counties have their own home buyer programs, most of which offer down payment assistance for those with qualifying low incomes. Nearly all state-run home loans are based on one or more of those in the list above. But they may come with lower interest rates and other perks for first-time home buyers. You can see a list of state home buyer assistance programs here.

Single mom first-time home buyer grants

Good Neighbor Next Door

This home buyer program helps single moms and dads who are also teachers, emergency medical technicians, law enforcement, and firefighters. Through Good Neighbor Next Door, qualifying buyers enjoy up to 50% off the list price, provided the home purchase is through the U.S. Department of Housing and Urban Development (HUD).

HUD homes are typically located in revitalization areas, which are intended to strengthen communities. Participants must commit to living in the property for at least 36 months as their primary residence to take full advantage of this program.

National Homebuyers Fund

The National Homebuyers Fund is a non-profit housing organization that offers affordable mortgage rates and down payment assistance for both returning and first-time buyers.

The program provides up to 5% of the mortgage loan amount in down payment assistance, making homeownership more accessible for single moms. Additionally, it features a variety of assistance types, including grants and second mortgage loans, some of which may not require repayment, depending on the buyer’s eligibility and the specific terms of the program.

Housing Choice Voucher Program

Available through select public housing authorities, this voucher program offers public housing residents a path to homeownership through their local HUD program. Not only does it help cover monthly mortgage payments, but it also can assist with down payment and closing costs, making the dream of homeownership a reality for more single mothers.

The Housing Choice Voucher Program includes mandatory homebuyer education sessions to prepare participants for the responsibilities of homeownership. Check with your local housing authority to see if it participates and to understand the specific eligibility requirements.

Homeownership for Public Housing Residents

This program authorizes public housing authorities in various states to sell units to existing residents and other low-income households in its service area. It provides a unique opportunity for single moms living in public housing to transition into homeowners, often with favorable financial terms.

The program may also offer supportive services such as financial literacy training and post-purchase counseling to ensure a successful transition from renting to owning. Check with your local housing authority for more information and to discover the steps to apply and qualify for this life-changing program.

State and local grants

Various state and local governments offer grant programs designed to encourage homeownership among specific populations, including single moms and low-income individuals. These grants, which do not need to be repaid, can be used towards down payments, closing costs, or even to reduce the principal of the loan.

Each state and local grant program has its unique set of criteria for eligibility, including income level, family size, and whether or not the buyer is a first-time homeowner. For example, the California Homebuyer’s Downpayment Assistance Program offers a deferred-payment junior loan to help eligible families with the down payment or closing costs.

As a single mom, researching these programs in your specific locality is essential. You can typically find this information through your state’s housing finance agency or local housing department. Furthermore, local nonprofits often have partnerships with government agencies and can be a valuable resource in navigating these opportunities.

Single parent home buyer assistance programs

Additional programs could help you purchase a house despite financial hurdles. While these home buyer assistance programs are not restricted to single parents, they’re often intended to help buyers on low or moderate incomes, and many single moms and dads fit the bill.

Habitat for Humanity

Habitat for Humanity is a non-profit housing organization active in all 50 states. Eligible participants will receive assistance in constructing their own homes with the help of qualified volunteers. You can apply for the program online or speak with your local chapter for more details.

Operation Hope

Operation Hope is a non-profit organization that provides HUD-certified coaches to help first-time home buyers improve their financial situations and identify potential home buying assistance programs in their communities.

Home buyer programs vary by region and state, but some operate nationwide.

In addition to the resources above, your real estate agent or Realtor will likely be able to point you in the direction of available options in your community. You should compare these programs to see which suits you best — just as you should with mortgage lenders.

Down payment assistance programs for single moms

Along with home buyer counseling, down payment and closing cost assistance programs are available in every state and can help single parents become homeowners. Each down payment assistance (DPA) program is different. But they usually provide up to several thousand dollars, or 3%-5% of a home’s purchase price, in assistance.

Down payment assistance generally comes in one of these four forms:

• An outright grant that never has to be repaid
• A forgivable loan, with zero interest and no repayment, that is forgiven over x years, (often 5-10). Once that time’s up, you owe nothing, provided you haven’t sold the home, refinanced, transferred ownership, or paid back your main mortgage
• A deferred loan, also typically with zero interest and no payments. But you have to pay back the full amount when you sell the home, refinance, transfer ownership, or pay back your main mortgage
• A low-interest rate loan ("second mortgage") that you pay back in equal installments over a set term, often 10 years. This is paid back in parallel with your main mortgage so you have two payments each month

Many programs offer more money or looser guidelines in areas that have been designated for regeneration. So, if you don’t mind buying your first home in a neighborhood that’s currently less desirable (but has prospects), you may be able to move more quickly.

Some state housing agencies also offer mortgage credit certificates or vouchers. This type of housing assistance gives qualifying borrowers a federal income tax credit, even if they take the standard deduction instead of itemizing deductions.

Down payment assistance requirements

Home buyer assistance usually comes with the following conditions. You must:

• Be a first-time home buyer (meaning you haven’t owned a home in the last three years)
• Complete a homebuyer education course
• Choose a mortgage lender from a list approved by the DPA program
• Have a household income at or below average for the area where you’re buying
• Not have significant savings or other assets
• Meet a minimum credit score threshold (often in the range of 580-640)
• Buy a home in an area covered by your DPA
• Buy a home within local purchase price limits

Each DPA is largely free to set its own eligibility rules and to decide how much to give applicants. So we can’t tell you whether you’ll be in line for help nor how much you might receive. But you can find out by doing a little research on your own (Google “down payment assistance in [your area]") or by asking your mortgage lender what’s available locally.

Tips for single mothers applying for home loans

Buying a home as a single parent presents unique challenges like budget constraints and meeting loan requirements. But there are strategies to overcome these, and understanding them is key in qualifying for home loans for single moms.

1. Use alimony, child support, and renter income toward your mortgage

Your salary isn’t necessarily your whole income. Other funds you receive regularly may boost your income and your home-buying power. For instance, as a single parent, you may receive alimony and child support. Mortgage lenders count those as part of your income. (You can learn more about eligible income sources for a mortgage here.)

In addition, both Fannie Mae and Freddie Mac may allow you to include rental income as part of your household income. Suppose you make $4,000 a month in salary and you plan to rent out a bedroom in your new home to a border for $600 a month. You can add that $600 to your $4,000 for DTI purposes.

2. Consider a co-borrower or co-signer

If you’ve read all the above and are still convinced you’re not eligible for home loans for single moms, you may have one other way to qualify. And that’s by getting someone either to co-sign the mortgage or to become a co-borrower.

But don’t get too excited about this idea until you’ve finished reading this section. Because there can be serious downsides to such an arrangement. If you persuade someone to co-sign your loan, that person’s credit score won’t make much difference. But their income will be added to yours when your DTI is calculated, which should make it much easier for you to get approved.

3. Improve your credit score

Your creditworthiness is a major consideration for lenders to consider when determining eligibility for a home loan. It reflects your past behavior with credit, including credit cards, student loans, and any previous mortgages. A higher score can lead to better loan terms and lower interest rates.

It’s worth reviewing your credit history for any inaccuracies and working towards paying off outstanding debts to improve your score. Using credit responsibly and making timely payments can also help you build a good credit score, which can save you thousands of dollars in interest payments over the life of the loan.

4. Save for a larger down payment

While several assistance programs can help with down payments, having personal savings can increase your borrowing power. Consider creating a budget to manage your monthly expenses and setting aside a portion of your income towards your home buying goal. Every little bit adds up and moves you closer to homeownership.

The size of your down payment depends on the type of loan or single mother home buying program you plan on using. If you’re unable to save enough, a gift from a family member or a grant from a nonprofit can sometimes be used to meet or supplement the down payment requirement, helping to make home ownership more accessible.

5. Lower your debt-to-income ratio

Lenders use debt-to-income (DTI) ratio to measure your monthly debt payments against your gross monthly income. This includes credit card payments, student loans, car loans, and your prospective monthly mortgage payment. A lower DTI ratio indicates a healthier balance between your debt and income, makes it easier to qualify for single mother home loans and secure better interest rates.

6. Maintain steady employment and income

Reliable employment and a steady income are crucial, especially for programs with specific income limits designed to help first-time home buyers or those qualifying for government-backed loans and down payment assistance.

Mortgage lenders value a stable job history and a consistent income that falls within these set income limits. This demonstrates a borrower’s financial stability and capacity to manage mortgage payments effectively.

7. No recent foreclosure or bankruptcy

If you’ve had a foreclosure or bankruptcy, there will typically be a waiting period before you’re eligible for another home loan. The length of this waiting period can vary, depending on the type of loan and lender’s policies, but demonstrating improved financial responsibility can help shorten that time.

8. Shop for the best mortgage rates

Finally, it’s important to shop around for the best mortgage rates. Different lenders can offer varying terms and interest rates, so taking the time to get quotes from multiple sources can help you find the best deal. This comparison can potentially save you thousands of dollars over the lifespan of your loan. Don’t hesitate to negotiate with lenders; every fraction of a percentage point reduction in your mortgage rate counts.

FAQ: Home loans for single moms

You may already be eligible for home loans for single moms

Many single parents are surprised by the variety of “home loans for single moms,” while others may need to improve their credit scores and DTIs before applying, but finding help and advice is usually straightforward.

A good place to start is with the U.S. Department of Housing and Urban Development (HUD). It provides lists of homebuyer education programs and down payment assistance programs by state. Simply click on the name of the state where you want to buy, and then keep clicking links until you drill down to the information you need.

According to that website, “HUD sponsors housing counseling agencies throughout the country to provide free or low-cost advice. Search online for a housing counseling agency near you, or call HUD’s interactive voice system at: (800) 569-4287.”

A good housing counselor should do much of the heavy lifting for you, advising on whether you’re likely to qualify for a mortgage, helping you to pick the right type of loan, and guiding you to your best choice of DPA. Happy house hunting!