If you are a single parent interested in purchasing a home, you may not know where to start. You will most likely need to get a mortgage to buy a house. Single parents can qualify for a mortgage but may face some extra challenges that borrowers from dual-income households do not have. Certain loans make it easier for borrowers to qualify. Programs are also available to help single parents purchase a home.

How Do You Qualify for a Mortgage?

Mortgage companies look at several factors in determining whether to approve a borrower for a loan. The lender reviews your credit report, so you must have good credit. You can maintain a high credit score by paying your bills on time and not incurring too much debt.

The mortgage lender also analyzes your income and debts to determine your debt-to-income ratio. Companies prefer borrowers with lower debt ratios and require that your total debts, including new mortgage payments, not exceed 36% of your total income.

You should list your income from all sources on your mortgage application, including child support payments. The lender may ask for documentation of any income listed, so you must show regular payments for at least six months for child support.

You can consider paying off some of your outstanding debt if you must reach the acceptable debt-to-income ratio. You should avoid taking out new loans in the months before applying for your mortgage, as these will increase your debt ratio and may lower your total credit score.

You will also need a certain amount of funds for a down payment toward the mortgage. As a single parent, you may struggle to save extra funds regularly. Some types of loans require lower down payments than others. 

What Are the Options for a Loan?

Although there is no specific loan product for single mothers, some types of loans may offer terms that are more attractive to a single parent. The basic types of loans are conventional, FHA, USDA and VA.

Conventional

Most mortgage companies offer conventional loans. These loans have different term options ranging from 10 to 30 years. You can get a traditional loan for as little as 3% down. However, if your down payment is less than 20% of the home's value, you have to pay mortgage insurance in addition to your regular payment.

Underwriters for conventional loans usually require the borrower to have good credit scores with no delinquencies. Lenders also want borrowers to have a lower debt-to-income ratio than for some other products.

FHA

Lenders offer Federal Housing Administration loans as part of a program to make homeownership available to a broader range of borrowers. You do not have to have spectacular credit to get an FHA loan. You also have more flexibility in your debt-to-income ratio.

Lenders require a down payment of about 3.5% for FHA loans, which allows you to purchase a home even with a limited amount of upfront cash. For any down payment amounts of less than 20% of the property value, you have to pay mortgage insurance payments at closing and with your monthly mortgage installments.

USDA

The U.S. Department of Agriculture loan program supports home ownership in rural areas for people with limited income resources. To qualify for a USDA loan, you must live in a zip code designated as rural and have income less than the maximum allowable.

The benefits of USDA loans include:

• No down payment

• Low-interest rates

• Less expensive mortgage insurance than other loans

VA

Loans from the U.S. Department of Veterans Affairs are a great option as they require no down payment or mortgage insurance. You do have to pay a fee to initiate the loan, but it usually has some of the lowest interest rates available to borrowers. The VA offers this program for veterans and their surviving spouses.

Can a Single Parent Get Assistance to Buy a Home?

Federal, state and local governments recognize home ownership's benefits, particularly for single mothers. As a result, many assistance programs are available to persons with limited income and resources to help them buy a home. You can get assistance with making the down payment, a grant or a tax break.

Local Housing Authority Resources

Your locality should have a local housing authority that will offer information and resources if you need assistance buying a home. The local housing authority may offer its own grants but can also put you in touch with other available programs at the local level.

HUD Programs

The U.S. Department of Housing and Urban Development offers counseling to potential homebuyers to assist with the buying and mortgage applications. HUD can also provide information about grant or assistance programs available in your area.

HUD also offers assistance through programs such as Good Neighbors Next Door. This program is available to first responders and teachers and offers discounts up to 50% of the list price of a home that needs revitalization.

State Assistance

Every state offers some type of assistance program to low-income home buyers. Some of these programs specifically cater to single parents. These programs can provide a grant for part of the down payment on a mortgage you do not have to pay back.

You may also qualify for a loan for the down payment as part of a state program. States also offer tax credits or reduced tax rates to buyers in certain areas.

Additional Programs

Additional programs are available for low-income single parents, including Habitat for Humanity's option for a low-interest loan in exchange for helping to build your home or others. Another option is the homeownership voucher program for persons receiving a housing choice rental voucher.

The National Homebuyers Fund is a nonprofit entity that offers grants for down payments. You can get up to 5% of the home's value from this group.

You have options if you are a single parent looking to become a homeowner. Many single mothers purchase homes every year. Assistance is available to help you qualify for a mortgage and make a down payment.