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 loans could help you get around the problem of lower income when buying a house as a single parent. There are also assistance programs that can offer money toward your down payment, as well as homebuyer education programs and one-on-one counseling to guide you through the home buying process.
All in all, buying a home as a single parent may be easier than you think.Verify your home buying eligibility. Start here
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
Are specialized 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.Check your home buying options. Start here
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.Verify your home loan eligibility. Start here
Here are a few of the more common home loans for single moms and dads.
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.
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
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 you and the home are eligible.
The U.S. Department of Veterans Affairs (VA) backs VA loans, which are only available to veterans, service members, and a few closely related groups. They come with zero down payment, no continuing mortgage insurance, and lower interest rates than most mortgages. Credit score requirements vary by lender and range from 580 to 660. VA mortgages are almost always the best loans for those who 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 grantsCheck your single parent home buying options. Start here
Good Neighbor Next Door
This home buyer program helps single moms and dads who are also teachers, emergency medical technicians, law enforcement, or firefighters. 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. Learn more about the Good Neighbor Next Door program in your area
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
Housing Choice Voucher Program
This program is available through select public housing authorities, this voucher program offers public housing residents a path to homeownership through their local HUD program. Check with your local housing authority to see if it participates.
Homeownership for Public Housing Residents
A program that authorizes public housing authorities in various states to sell units to existing residents and other low-income households in its service area. Check with your local housing authority for more information
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.Verify your home buying eligibility. Start here
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 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.
Single mom down payment assistance programs
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.Check your home loan options. Start here
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 moms applying for home loans
Buying a home as a single parent presents unique challenges. But there are creative strategies you can often use to overcome those roadblocks. Here are a couple of examples.
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 credit score is a crucial factor that lenders consider when determining eligibility for a home loan. A higher score can lead to better loan terms and interest rates. It’s worth reviewing your credit report for any inaccuracies and working towards paying off outstanding debts to improve your score. Using credit responsibly and making timely payments can also contribute positively to your credit health.
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.
5. 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
Check your mortgage eligibility. Start here
Home buying requirements for single parents
Every lender will want to be sure you can comfortably afford your monthly payments and the additional expenses that come with homeownership. As a single parent, understanding the requirements to qualify for home loans for single moms is key. These requirements may vary by loan type and lender, but here are some common ones:
- Credit score: Your credit score is a major consideration for lenders as it gives them a snapshot of your creditworthiness. It reflects your past behavior with credit, including credit cards, student loans, and any previous mortgages. A higher credit score often leads to better loan terms
- Debt-to-income ratio (DTI): Lenders use 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
- Employment and income: Reliable employment and a steady income are essential. Lenders usually prefer borrowers with a stable job history and steady income that meets their income limits
- Down payment: While some loan programs may offer low or zero down payment options, generally, a down payment is required. The size of this down payment can vary. If you’re unable to save enough, a gift from a family member or a grant from a nonprofit can sometimes be used
- 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
Remember, single parents have access to several resources to aid in the home buying process. For example, the National Association of Realtors offers a wealth of information and resources for first-time home buyers. It’s also helpful to seek advice from a financial advisor or real estate professional familiar with the unique challenges faced by single parents in the home buying process.
Understanding the home buying process
Navigating home loans for single moms can be a challenging yet complicated journey. However, understanding the home buying process can demystify these complexities and empower you to make informed decisions. Here’s a breakdown of the main steps and the requirements you’ll likely encounter:
- Mortgage pre-approval: Before you start hunting for your dream home, it’s vital to know how much you can afford. Mortgage pre-approval involves a lender assessing your financial situation, including your credit score, debt-to-income ratio (DTI), reliable income, and job history. This process gives you an estimate of the loan amount you might qualify for, which can guide your house hunting.
- House hunting: With your pre-approval in hand, you can start looking for a home within your budget. You might want to consider factors such as location, proximity to good schools, neighborhood safety, and home size to meet your family’s needs.
- Making an offer: Once you’ve found a home you love, you can make an offer. If the seller accepts, you’ll enter into a contract negotiation to agree on the terms of the sale.
- Home inspection and appraisal: After the contract is signed, you’ll typically have a home inspection to ensure there are no hidden issues. The lender will also order an appraisal to determine the home’s value.
- Closing: Closing is the final step in the home buying process. It involves finalizing the mortgage loan, signing all necessary documents, paying closing costs, and receiving the keys to your new home.
Understanding these steps and their requirements is key in qualifying for home loans for single moms. For example, maintaining a low DTI ratio and a good credit score can increase your chances of pre-approval. Similarly, demonstrating a reliable income and stable job history can reassure lenders of your ability to repay the loan. These factors are crucial to navigating the home buying process successfully.
Check your home buying eligibility. Start here
FAQ: Home loans for single moms
Yes, there are home loans specifically designed for single moms. These include various programs like FHA loans, VA loans, and USDA loans, which often have more lenient eligibility requirements. Additionally, many states and local governments offer special grant and assistance programs tailored to help single moms and other low-income individuals achieve homeownership. Government programs offering home loans for single moms can provide much-needed financial support.
Absolutely, there are first-time home buyer loans available for single moms. These often come with benefits such as lower down payments, reduced interest rates, and easier qualification criteria. Examples of these include FHA loans and certain state-specific first-time homebuyer programs. Researching the best home loans for single moms will help you identify the ideal program for your circumstances.
A single parent can save for a house through diligent budgeting, reducing unnecessary expenses, and setting aside a specific amount from their income each month towards a home buying fund. Additionally, they can take advantage of various programs offering down payment assistance, or grants from local or national organizations to aid in their savings goal.
Yes, child support can count as income for a mortgage. However, lenders often require documentation to verify this income. This may include court orders or documentation showing regular receipt of these payments. It’s important to note that lenders might want to see a track record of receiving these payments and assurance that they will continue.
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!Time to make a move? Let us find the right mortgage for you