Can You Buy a Home While on Social Security Disability Benefits?

in real •  7 months ago

Many people on Social Security disability benefits wonder if they can actually buy a home rather than rent. Most fear that they don't have enough income or simply due to the fact that they are on disability may disqualify them from being able to buy a home and carry a mortgage. It's important to know that there are several programs that help disabled individuals qualify for mortgage, which means that it is not impossible but there are a few eligibility requirements, as with any home purchase.photodune-3804690-stroll-in-a-wheelchair-xs.jpg

Regardless of your current situation, your credit score will play a large role in your eligibility for a mortgage. Lenders look at credit score and credit history when determining whether or not to approve a home loan. If your credit scores less-than-perfect there are still programs available that allow for eligibility but they may require higher interest rates.

Related: Factors that can End Social Security Disability Benefits

Fannie Mae Community HomeChoice program is one such option. It offers assistance to disabled individuals who may have limited income but still would like to be homeowners. The program will evaluate your credit rate and can also provide different loans that allow you to make improvements to the home if they are directly related to your disabled situation. Even if you have a lower credit rating, you may qualify for this home loan program depending on your monthly benefit amount. It's important to check with lenders on their requirements and eligibility.

Other options include Section 8. This is not just for renters. This program may also help you purchase a home if you qualify and you can receive assistance in making monthly mortgage payment adding to the affordability of home ownership.

Habitat for Humanity is another option that can help those on Social Security disability benefits. It is geared toward low income families and provides low-interest mortgages in terms from seven years to up to 30 years. Many of these programs require the home be improved to some degree in order to assist with your disability. These programs are organized at the community level so eligibility rules vary from state to state and maybe even city to city.

The down payment may also be an issue for those on Social Security disability. Choosing a lender that is very creative with financing options is one of the best ways to afford the down payment. Fannie Mae offers down payments of little as $500 and there are other options, especially if you plan on improving the home. There are grants and gifts that you can use for down payment needs as well as programs such as the IDA program, which allows you to save money toward your down payment and will match part or all of the money put into the account.

Read More: Does my Age Affect my Social Security Disability Benefits Eligibility?

The best way to start the process is to check with a lender in your area that may provide these type of programs. Establish your needs and determine how much you can afford so that you know what type of home and even the neighborhood in which you can purchase. The Department of Housing and Urban Development has approved housing counselors in every state certified to help disabled individuals purchase a home. You are also protected by the Fair Housing Act that prohibits housing providers from discriminating against you in any area of the process. This includes lenders, homeowners that will sell you the property and real estate agents.

So, it is very plausible that if you are on Social Security disability benefit you may still be able to purchase a home but of course, there are eligibility requirements, credit requirements and basic down payments as with any mortgage. Be sure to check with local lenders and disability assistance programs in your area.

Resources:

5 Ways to find Good, Cheap Deals in Real Estate

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  trending

Good Info