Return to the Buying and Selling Homes Forum | Post a Follow-Up

 o
home loan programs for low income individuals

Posted by newhomeseeker (My Page) on
Tue, Oct 19, 10 at 11:15

Can someone explain to me that in this day and age of the banks tightening their belts regarding who they will lend money to- what type of programs are out there that would lend a single mother of 2 kids with limited income (she makes $9 an hour and does not always get 40 hours per week. She has been at her job a little over a year but is looking for a new job so she can afford a house) She had less than $1000 to use as a down payment. How does one with such low income and does not have excellent credit (she filed bankruptcy about 9 years ago and while she doesn't have any large debt (pays cash for older car etc) she hasn't established new credit ( no credit cards or bank loans). how does someone with this history obtain a loan for $86,000 to buy a fixer upper? She was handed the keys last week. This was not a foreclosure.

I know that USDA has programs for people who are low-income that guarantee the loan and also assist with a small portion of a down payment. But there is NO possible way this person is going to be able to afford her $700 + a month house payment on her income. She receives no addtional income (child support etc) either. I'm just curious what types of programs are out there.


Follow-Up Postings:

 o
RE: home loan programs for low income individuals

There are an infinite number of private and public programs that help all sorts of people. If you know this woman well enough to know all of her financial details, then you are probably close enough to ask her how she got such a generous loan.


 o
RE: home loan programs for low income individuals

There are programs for lower to medium income people, especially first time home buyers. I got my mortgage through a first-time homebuyer program with US Bank that had a $1000 down payment and no PMI. It was a standard, 30 year fixed mortgage.

However, $9/hr and not always hitting 40 hours a week is really weird that she would be able to get a mortgage. When I got my mortgage, I made quite a bit more than that and I sometimes felt that my $550 was a bit of a struggle, but nothing major. And although for the particular program US Bank had they were more forgiving of some past credit problems, they certainly weren't all-forgiving. I had to go through the ringer to get my mortgage. They wanted to be 98% certain I would pay it back, which I am, even being unemployed. The program I went through also wanted to see continuous employment for longer than a year.

It sounds like she is going to have significant trouble affording her mortgage. The bank authorized me to purchase a more expensive home but I did not.

There may be some things that you don't know about the situation? Maybe child support she doesn't tell you about or something?


 o
RE: home loan programs for low income individuals

USDA also has subsidized programs.

Why do you ask?


 o
RE: home loan programs for low income individuals

Hi newhomeseeker,

I'm just curious what types of programs are out there.

Why?


 o
RE: home loan programs for low income individuals

Correct me if I am wrong, but isn't this the sort of thing that caused the financial ills, or is this really a minor event??
I believe that this sort of risky loan would never have happened 50 years ago..when I bought my first house (17K, 20 or 30 years, 5.25%, $700 down)...
The memory fades....
Believe it or not, that same house(1542 Lincoln Blvd) is now appraised at $335K !!
Talk about inflation !


 o
RE: home loan programs for low income individuals

The person who obtained the home loan was my SIL. No child support and thats a fact. Her ex doesn't even have a job and has 4 other kids to support. I'm curious because my sister and BIL have been trying to buy a house and they have two incomes (but no children) and make A LOT more money than my SIL and they have decent (but not excellent) credit and they don't have a huge downpayment (have about 5-10% depending on the purchase price) and they haven't been able to get a loan. They've tried USDA (they qualify for the guaranteed home loan program but not the other than assists with a downpayment). So it just blows my mind that someone who makes $9 hr could get a loan for that much money. I'm predicting it will be another foreclosure in the next few years. I don't see how she will be able to afford the monthly payments (she was telling us that when she was first approved the bank told her the payments would be around $400 mth. But there is NO way they will be that low when you add in property taxes, insurance etc.


 o
RE: home loan programs for low income individuals

There are many subsidized programs for people of lower ecomonical means. Part of the subsidy can pay to reduce the borrowers interest rate which in turn would reduce the borrowers payment.

But the part about her not being in a job for a year and part time seems like it would kick her out. Unless she's been in part time work at different jobs for a couple of years?

As others said ... there are all kinds of subsidized programs through cities, states, etc. to get people into houses still.


 o
RE: home loan programs for low income individuals

"there are all kinds of subsidized programs through cities, states, etc. to get people into houses still."

Just to keep fueling the mortgage default crisis.


 o
RE: home loan programs for low income individuals

Why not just ask her, and then report it back here.


 o
RE: home loan programs for low income individuals

brickeye, stop quoting from all my posts. you are really rude.


 o
RE: home loan programs for low income individuals

"brickeye, stop quoting from all my posts. you are really rude."

That is a new one.

Maybe you should stop posting if it bothers you that you get quoted.


 o
RE: home loan programs for low income individuals

"there are all kinds of subsidized programs through cities, states, etc. to get people into houses still."
Just to keep fueling the mortgage default crisis.
This makes no sense to me(the response).
I think that this problem, and the financial "melt-down" was caused by unregulated greed.
The greed has always been around, but strict rules and regulations are necessary...This has been proved over and over.
When man improves his attitude, then the rules can be relaxed.

And this "no posting and rude" business....hard for me to comprehend this.
I post, expect to have the post read, quoted, disagreed with or just ignored, whatever...I do not expect perfection, nor do I "give it".
The strength of this and other good forums is the posters, here its very good.


 o
RE: home loan programs for low income individuals

"I think that this problem, and the financial "melt-down" was caused by unregulated greed. "

At least the initial trigger (AIG) and the investment banks.

Fannie & Freddie also collapsed under the weight of bad debt.

Some from outright fraud, some from lowering standards for borrowing.

Banks were pressured under the Community Reinvestment Act to make loans in formerly 'red lined' areas or face penalties.
This added even more fuel to the fire.

Fannie & Freddie (no longer GSEs but outright government owned entities) represent a long term problem in the many trillions of dollars.

Unlike AIM, they are unlikely to recover at least come fraction (possibly large) of the debt they hold.


 o
RE: home loan programs for low income individuals

"you are really rude."

??
Since when is quoting and responding rude?

That's what message boards are all about....


 o Post a Follow-Up

Please Note: Only registered members are able to post messages to this forum.

    If you are a member, please log in.

    If you aren't yet a member, join now!


Return to the Buying and Selling Homes Forum

Information about Posting

  • You must be logged in to post a message. Once you are logged in, a posting window will appear at the bottom of the messages. If you are not a member, please register for an account.
  • Posting is a two-step process. Once you have composed your message, you will be taken to the preview page. You will then have a chance to review your post, make changes and upload photos.
  • After posting your message, you may need to refresh the forum page in order to see it.
  • Before posting copyrighted material, please read about Copyright and Fair Use.
  • We have a strict no-advertising policy!
  • If you would like to practice posting or uploading photos, please visit our Test forum.
  • If you need assistance, please Contact Us and we will be happy to help.


Learn more about in-text links on this page here