Low-income home loans are designed for people with low income, who can’t afford to buy a house. While mortgage exists for people, whose income is less than the price of the house, low-income home loans are created for people, whose income is much much much lower than the price of the house.
There aren’t that many programs and home loans for low income but they still exist.
There are three ways to get home loans for the low-income family:
- Mortgage insurance. In such cases, the government insures the mortgage loan provided by the private lender. FHA and VA loans are the examples of the mortgage insurance. It helps people with low-income qualify for a mortgage.
- Direct lending. The USDA rural housing program is the best example of the direct lending when the government skips the private lender and offers loans directly.
- Grant programs. Non-profit or government agencies offer monetary grants for home buying.
There are also state-sponsored programs, which also allow applying for home loans for low-income families.
Bad credit low-income home loans exist but qualifying for them is, obviously, more complicated than with a good or average credit.
P.S.: Check the review of a home-buying season 2016.