Can you get government assistance for buying a home?

government assistance for buying a home

Purchasing a home can be an overwhelming process. Nonetheless, there are programs put in place to help assist those who want to purchase a property. 

There are various loans and government assistance programs for those to apply for, but these qualifications do vary. Read more to see if you are eligible to apply for some of these loans or programs to help you get one step closer to purchasing a home. 

Can I buy a house with low income?

There is no minimum income requirement when it comes to buying a house, but unfortunately, it can be trickier for those within this income bracket. This is because those with low income or low credit scores may have a harder time getting approved for a mortgage. However, people within this income range still have options when it comes to purchasing a property. You just need to know where to look. 

How do homeowner assistance programs work?

These programs are set in place to make purchasing a home more accessible to the public. Some homeowner assistance programs provide interest-free loans along with closing cost assistance for eligible candidates. 

In addition, they can come in the form of grants, down payments, and government assistance. Eligible candidates do vary depending on your household income and current situation. 

For example, the Homeowner Assistance Fund considers applicants who have a household income that is equal to or less than 100% of the Area Median Income (AMI) and is at risk of being displaced due to the COVID-19 pandemic resulting in financial hardship. Each program has different specific criteria, so it is important to thoroughly read the guidelines. 

12 ways to get assistance buying a home

There are assistance programs set in place to help you purchase a home. Find out which ones you qualify for to get one step closer to becoming a homeowner. 

FHA loan

An FHA loan is a U.S. Federal Housing Administration mortgage loan that can allow you to make a down payment as low as 3.5%. This type of loan is less restrictive than others since it has a more lenient credit score requirement. 

These requirements are generally looser than traditional mortgages since those who have filed for bankruptcy and have debt are encouraged to apply. Additionally, it is not just for first-time buyers, repeat buyers could purchase property with an FHA loan. 

However, since these applicants are deemed as “riskier” to lenders, FHA loans have higher interest rates on their monthly payments. 

Best for: 

  • Those with low credit scores 


  • Have a FICO credit score between 500 and 576 with 10% down 
  • Have a FICO credit score of 580 or higher with 3.5% down
  • Record of employment for the past 2 years
  • Must be used to finance a primary residence
  • Front-end debt ratio no more than 31% gross monthly income
  • Must have no more than 43% of gross monthly income

FHA 203(k) loan

An FHA 203(k) loan is a U.S. Federal Housing Administration that functions as two loans in one. Firstly, the loan will help you purchase a property that needs repairs and improvements. 

Secondly, a part of that same loan helps fund these repairs needed. Since lenders typically won’t approve loans that need major repairs this loan addresses that issue. Since this loan is also provided through the Federal Housing Administration, the same requirements apply to an eligible candidate.

Best for: 

  • Those who wish to repair a home


  • Same requirements apply as the FHA loan
  • Also, home must meet property eligibility requirements 
  • Home must be prime residency

VA loan

A VA loan is a type of mortgage that is provided through the U.S. Department of Veteran Affairs. This loan is a benefit granted to those who have completed 90 days of active-duty service or six years in the Selected Reserve or National Guard. 

This loan requires no down payment, has lower closing costs, doesn’t have a prepayment penalty, and does not require mortgage insurance. Additionally, it is significantly easier to apply for VA loans and they have a government guarantee. Overall, this loan is a great option for veterans since it offers lower interest rates and terms in comparison to traditional home loans.

Best for: 

  • Veterans


  • Served 181 days of active duty during peacetime
  • Served 90 days of active duty during wartime
  • Served more than 6 years of service with the National Guard or Reserves,
  • The spouse of a service member who passed 
  • The spouse of a service member who has a disability due to their active duty 

USDA loan

The USDA loan, also known as the USDA Rural Development Guaranteed Housing Loan Program, is a mortgage loan that caters to rural homeowners. Unlike the FHA loan, the USDA loan has no down payment. 

However, this loan program has more restrictions around the candidate’s income and the property’s location. Eligibility for a household, of 1 to 4 members, requires an income lower than $91,900 in the majority of areas of the country. 

Since this loan is for those with low income, the interest rates on the USDA loan can be small as 1%. Additionally, a property must be within a rural area but some pockets of suburbs may qualify.  

Best for: 

  • Rural homeowners


  • Household income lower than $91,900
  • Household of no more than 4 people
  • Credit score of at least 640
  • Employment for at least 2 years
  • Debt payments cannot exceed 41% of your monthly income
  • Home’s location must be rural

Good neighbor next door hud loan

Offered by the U.S. Department of Housing and Urban Development, the Good Neighbor Next Door program helps law enforcement officers, teachers (pre-K through 12th grade), firefighters, and emergency medical technicians become homeowners. 

This program offers a 50% discount on a home’s listing price within revitalization areas. Revitalization areas are designated by Congress to promote homeownership opportunities within the neighborhood.   

Best for: 

  • Law enforcement
  • Teachers
  • Firefighters
  • Emergency responders


  • Occupation requirements
  • Have to be a law enforcement officer, teacher, firefighter, or medical technician
  • Property must be within revitalization area 

Native American direct loan

This loan is for Native American veterans who want to purchase or repair a home within Federal Trust land. To be eligible for this loan, these Native American veterans must have the same military qualifications as the VA loan, such as length of active service. 

This loan is solely for a primary residence. However, you could also use this program to refinance an existing Native American Direct loan. To qualify for this loan, you must be a Native American in a tribe or an Alaskan Native Village, a Pacific Islander, or a Native Hawaiian. Additionally, if your spouse fits this criteria, you are eligible to apply as well. 

Best for: 

  • Native American veterans


  • Be a Native American in a tribe or an Alaskan Native Village
  • Be a Pacific Islander
  • Be a Native Hawaiian 
  • An active duty service member
  • A veteran of either the Reserve or the National Guard
  • A current Reserve or Guard member with over 6 years of experience

Energy-efficient mortgage

This mortgage-backed loan helps families save money on utility bills for already energy-efficient homes. Additionally, this loan can assist them in transforming their home as energy efficient. 

The Energy-Efficient Mortgage program acknowledges the fact that this type of home has lower operating costs, which in turn, makes it more affordable for its homeowners. By implementing these improvements and lowering costs, homeowners can more easily allocate their income towards their mortgage payments. 

However, this loan requires a professional to conduct a home energy assessment on the property to determine its Home Energy Rating System (HERS) score. This score will help lenders determine whether your home is suitable for an energy-efficient home. Some government departments and companies that provide this type of mortgage include the FHA, VA, Freddie Mac, and Fannie Mae. 

Best for: 

  • Energy-efficient homes 


  • If your property’s HERS score will increase with energy-efficient improvements
  • Credit score, veteran status, and debt-to-income ratio requirements 

Local homeowner assistance programs

These state-run housing programs help their residents meet affordable housing needs through homeownership, rental, and other types of housing. Since these programs are dictated by the resident’s state, use The National Council of State Housing Agencies and HUD, to find your local program in order to see what the requirements are to qualify. 

For example, in Texas, the Texas Department of Housing and Community Affairs provides rent relief, COVID-19 assistance amid financial hardships, and a homebuyers’ program. Depending on your selected program, additional eligibility may apply.

Best for: 

  • Rental and homeownership assistance


  • Have a primary residence located in the state
  • Possess a good credit rating score 
  • Bring in a low-to-moderate income range

National Homebuyers Fund

The National Homebuyers Fund is a nonprofit corporation that helps assist borrowers in closing costs and down payment assistance. This is available nationwide for first-time homebuyers as well as repeat buyers. 

Since this fund is nonprofit, typically the grants and loans provided do not have to be repaid. This fund can provide a grant up to 5% on your total mortgage amount. Additionally, they provide a second mortgage loan with a 0% interest rate which is typically large enough to cover your down payment and closing costs. 

Best for: 

  • Those with low to moderate incomes


  • Low to moderate household income
  • FICO score minimum of 640
  • Debt-to-income ratio maximum of 45%
  • Fund’s assistance to be used for conventional or FHA, VA, and USDA loans

First home club

The First Home Club program, provided by the FHA, is a financial assistance program for first-time homebuyers in New York. In short, this program grants up to $7,500 in matching funds for the down payment and closing cost of the property. 

How this works is that within the First Home Club Matched Savings Program, each participant is able to earn up to $4 on every $1 saved in their designated account. This program was put in place to encourage first-time homebuyers to be prepared for the upfront costs that come with purchasing a home. 

Approved applicants must also save up to at least $20 a month over a minimum of 10 months in order to stay in this program. 

Best for: 

  • First-time homebuyers in New York


  • Household income limit of $65,600 for 1 or 2 people
  • Household income limit of $75,440 for 3 to 4 people
  • New York residency
  • Must be a first-time homebuyer
  • Must have completed an accredited homeownership course
  • Have a minimum contribution of $1,000 to the home
  • Meet FHA credit score requirements

HomeReady and Home Possible

HomeReady and Home Possible are two separate low downpayment mortgage programs. HomeReady has more flexible guidelines when it comes to eligibility for both income and credit requirements. 

This program permits the use of non-traditional credit score resources for those who have little to no credit score history. Additionally, it allows applicants to qualify using non-traditional income sources; this includes recording income given from a non-occupant such as a parent. 

Whereas HomePossible allows borrowers to have a non-occupant co-borrower and have non-traditional income sources in their application. HomePossible also is for lower-income borrowers and is a borrower-friendly program for those who wish to buy a home that requires repairs. 

Best for: 

  • Those who want a non-occupant co-borrower on the application


  • Income limit of 80% area median income
  • Maximum loan-to-value ratio of 97%
  • Maximum debt-to-income ratio of 50%
  • Minimum credit score of 660

Dollar homes

The Dollar Homes program helps local governments provide opportunities for low to moderate-income families to purchase the property. These single-family homes are provided by the FHA due to the foreclosure of the previous residents. 

Additionally, these homes are offered into the Dollar homes program after six months on the market with no prospective buyers. After this time period, these properties with a market value of $25,000 or less are sold for $1. This is to promote revitalization and repairment opportunities as well as homeownership.  

Best for: 

  • Prospective buyers and repairers


  • Plan to live in the home after one year of purchasing 
  • Have not purchased another HUD property within the last 2 years 

Making the homebuying process more affordable

These 12 separate programs cater to various prospective home buyers to make the home buying process more affordable. Depending on your state, credit score, income level, and military status some of these programs you may be eligible for. 

Utilize these resources to make the home purchase process less stressful and economically straining. Regardless of your income or credit score, there are resources available to help assist you in purchasing a home.


Can I buy a house with low income?

Yes, you can buy a house with a low income. There are assistance programs available that can help with downpayment, closing costs, and low interest rate loans.

What is first time home buyer assistance?

This program allows first-time buyers to have an easier time purchasing a home by providing low monthly mortgage payments. It is a shared equity mortgage in which you borrow around 5-10% of the purchase price of the home.

What is a home buyers assistance program?

This program offers interest-free loans, closing costs, and down payment assistance to qualified buyers. These applicants tend to be eligible for these programs due to income level and credit score requirements.

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