Real Life Homebuyer Success Stories – Low Income Mortgage

Low Income Mortgage Options Help Renters Become Owners

You don’t have to have a whole lot of money or a high-paying job to buy a house. There are plenty of low income mortgage programs for tight budgets. Grant money and community assistance is widely available.

This sounds almost unbelievable in this era of tougher regulations and rules. But all over the country, people with low incomes are buying homes.

Here are some examples of people who found the perfect low income mortgage to fit their needs:

A Single Mom Sticks With Her Plan

Naomi Hattaway, Realtor and owner of 8^th & Home in Reston, Virginia, maintains strong relationships with local lenders. They keep her in the loop when grant money is available to her homebuyers. These lenders also work with her clients directly. They educate borrowers, help improve their credit score and save their down payments.

One of the best experiences she has had with a client involved a single mom of two young boys.

“With the advice of her lender and myself, she went above and beyond and worked for two years to adjust her saving and spending habits so that she could purchase the home of her dreams,” Hattaway says.

Once her numbers were good, Hattaway showed her 15 homes. The client chose a 3-bedroom townhome with a big family room and wood burning fireplace in Northern Virginia.

The client was able to qualify for a Virginia Housing Development Authority conventional loan. This included a $5,000 grant covering all of her closing costs.

“It was a special transaction because she was so insistent on understanding all of the numbers and every bit of the transaction,” Hattaway says.

“She was purchasing as a way to grow her family’s wealth, and you could tell it was so important to her. At the closing table, the young mother said with a wide, proud smile, ‘I did it, all by myself.’“

College Student Buys Home With Rental Unit

Yael Ishakis, a vice president and loan officer at First Meridian Mortgage in Brooklyn, N.Y., recently closed a loan for a young woman still in college.

“She had a part-time job and didn’t really earn a lot. She wanted to purchase now, as she wanted to take advantage of the low rates offered and possibly earn some rental income on the second unit in the house,” he said.

Many loan programs let you count part of the rent as income when you buy a house with rental space.

“We used 75 percent, so even though she didn’t have job longevity and wouldn’t have qualified with her low income, we used the second unit and her mom’s income as a non-occupying co-signer,” he says.

Non-occupying buyers are on the loan documents and on the property title. Co-signers, on the other hand, are not on the home’s title. They have what’s called “contingent” liability, because they’d be responsible for repayment if the borrower defaults.

Designer Uses Sweat Equity and FHA Financing

Robin Wilson is an interior designer, author and entrepreneur of hypoallergenic products sold at big retail stores like Kohl’s and JC Penney. She also wrote two award-winning books about green design.

But a divorce took 90 percent of her income and savings to pay for attorneys.

Through it all, she was able to purchase a New Jersey home in April 2016, using an FHA mortgage.

“The house was unoccupied for more than 250 days, and the owner had not listed the property on the MLS system as he was trying to sell it on his own,” Wilson says. “The house was in dire need of tender loving care.”

FHA allows borrowers to finance home improvements as well as the purchase if the buyer chooses.

Since Wilson was a designer, she was willing to tackle the project. She used the last of her savings and did much of the interior demolition of all the laminate floors that had been installed over original oak planks.

“By December 2016, only eight months later, the house was appraised at $760,000 from the original $590,000 purchase price,” she says. Now she can refinance and remove the private mortgage insurance from her monthly payments.

What Are Today’s Mortgage Rates?

Interest rates are still really low for low income mortgage programs, which helps make home buying affordable for many. Check with several mortgage lenders for programs. make sure you provide your income, because many programs have income-eligibility requirements.