Home Loans and Housing Programs for Single Mothers with Bad Credit

Last Updated on May 16, 2024 by Wade

If you’re a single mother with bad credit, but looking for an ideal home loan for your family – you’re in the right place. Bad credit has a way of affecting many aspects of one’s life, and single moms often find themselves in this situation, in need of housing or apartment help – with a bad credit score.

What Is A Bad Credit Score?

FICO (Fair Isaac Corporation) is the most widely used scoring module that analyzes your payment history, credit card balances, and overall debt owed. FICO then scores you a number between 300 and 850. Any figure less than 580 is insufficient. A score between 580 and 669 is low. Anything higher than 669 ranges from good to exceptional.

There are ways of improving your existing score. Such as regularly reviewing your credit report, reducing your overall debt, paying your bills on time, limiting the number of credit cards you own, and maintaining credit card balances under 30%. It roughly takes between 12 and 18 months of steadfastly applying these methods to rebuild a creditworthy profile.

Help For Single Moms With Bad Credit

A significant trait nestled at the core of being a parent is realizing one’s extraordinary inner strengths. Having a child is undoubtedly a gift on its own. Raising a child necessitates an entirely selfless and unlimited supply of patience, understanding, commitment, ingenuity, and grit.

Single mothers face additional adversities seeing as they cannot split the chores or bills with a co-parent. Solely navigating parenting’s financial responsibilities can easily lead to a bad credit profile, which further complicates single motherhood’s already daunting tasks. No matter your financial situation, every mom deserves a home to call her own and raise her children.

While rebuilding good creditworthiness takes time, various housing program opportunities are available right now for single mothers with bad credit. We will be looking at options available to anyone who has a credit score of less than 669.

Read through the following options to find the best home loan or assistance program a single mother can get, and reach out to those that best suit your current status.

Low-Income Home Loan For A Single Mother

FHA Home Loan For Single Mothers

• A minimum credit score of 500
• 10% down payment with a credit score of between 500 and 579
• 3.5% down payment with a credit score of 580 or higher

The Federal Housing Administration (FHA) has designed mortgages aimed at lower-income households with lower-than-average credit scores. When approved for an FHA loan, the FHA does not lend you the funds directly; an FHA-approved lender funds you. However, the FHA guarantees your loan. And so, when qualified for the loan, you would need to pay mortgage insurance premiums directly to the FHA. You could try contacting a local charity service, family member, or your local HUD-approved housing counselor should you need help with a down payment.

Visit their website or call this Toll Free number for further inquiries and assistance: (800) 225-5342

Section 8 Housing With Bad Credit

• They don’t check credit scores.
• Eligibility requires an income not exceeding 50% of the local median.
• Available to US citizens and approved non-citizens.

Section 8 Housing is a federal housing subsidy administered by your local Public Housing Authority (PHA). It offers a tenant subsidy known as the Housing Choice Voucher Program. When the tenant moves, the financial backing follows the tenant to their new home. Then there is a Project-Based Voucher, a subsidy attached to the property itself.

Should a tenant vacate a Section 8 property, the next tenant to move into that property receives the assistance. When accepted as a candidate for Section 8 Housing, you pay 30% of your monthly income toward the rental each month. The government will cover the balance of the rental payment. Consequently, Section 8 Housing is an exceptionally sought-after option, so there is usually a waiting list. For further inquiries and application, contact your local PHA or contact the PIH Customer Service Center (800) 955-2232

The Operation HOPE Home Buyers Program

• Credit scores are not relevant for eligibility
• Anyone with low income or financial struggles is eligible for assistance

Operation Hope is a non-profit initiative aimed at empowering low-income members within a community. Here, single mothers have access to assistance with gaining pre-approved FDIC loans, down payment assistance, and free guidance toward rebuilding a stable credit status.

For further inquiries, you may either contact them at (888) 388-4673 or visit their website.

USDA Home Loan For A Single Mother

• A minimum credit score of 640
• No down payment required
• 100% financing

USDA Loans are housing programs backed by the U.S. Department of Agriculture. These are housing loans suited to single mothers with not-so-great credit profiles willing to live in rural areas. The benefits are enticing in that there is no down payment required.

Visit their site for more information regarding eligibility and applications.

HomeReady and Home Possible Loan For A Single Mother

• A minimum credit score of 620
• 3% down payment
• 80% cap on meridian income

HomeReady is made possible by Fannie Mae and Home Possible by Freddie Mac. These home loans are competitive to the FHA Loans concerning the FHA requiring monthly mortgage insurance payments. Once your Home Possible loan balance drops to under 80%, the lender will be free to cancel all other mortgage insurance.

HomeReady: 800-2FANNIE (800-232-6643)
Home Possible: 1-800-FREDDIE

VA Loans

• There’s no minimum credit score
• No down payment
• No mortgage insurance
• Spouse of late army personnel

A VA Loan is an enormous opportunity for a single mother spouse of a late veteran. You would need to apply for a VA Home Loan COE (Certificate of Eligibility).

Go to their website for further information and application for COE or call 877-827-3702.

In conclusion, we hope this article gave you all the answers you’re looking for when it comes to housing for single moms. However, if you haven’t found what you’re looking for, check out our housing assistance for single moms page for more information.