Getting a home loan as a low-income American is a lot easier than you might think. Keep reading to learn more about FHA loans and homeowner grants that could save you thousands of dollars!

FHA Loans and grant programs make it much easier for low-income Americans to purchase a home. Even if you have a less than stellar credit score or don't have a 10% down payment, you can still qualify for a federally backed loan. Keep reading to find out some helpful information about federally funded grants and housing programs. 

FHA Loans

FHA Loans were designed to make it easier for low-income Americans to get on the property ladder. FHA loans have less strict lending requirements than most other traditional lenders. For example, with an FHA loan, you can have a downpayment as low as 3.5% of the loan amount value and a credit score as low as 580.  

FHA Loans are the ideal option for first-time buyers who want to get on the property ladder but haven't yet saved a substantial down payment. FHA loans can also be a great option for people with a credit score of less than 600, who conventional lenders would typically not lend too.  

To qualify for an FHA Loan, you must meet some of the following criteria:

• Credit score of at least 500 
• Mortgage Insurance Premium 
• Debt-to-Income Ratio lower than 43%.
• The home must be your primary residence.
• You must have a steady income and can provide proof of employment.

Down Payment Toward Equity Act

First-time homebuyers may soon be eligible to receive a cash grant toward their new purchase. The Down Payment Toward Equity Act enables first-time home buyers to claim a free $25,000 grant if they meet certain criteria. This program is designed to assist renters in purchasing homes and getting their foot on the property ladder.

Your income must be no greater than 20% above the median household income for your metro area to be eligible for this grant. For instance, if the median income in your area is $30,000, then your income can not exceed $36,000. 

Rent Payment Assistance

If you need help with your accommodation, Rent Payment Assistance could be a solution. The Housing Voucher Program provides low-income Americans with a voucher that enables them to rent corporate complexes and private property.

The Housing Voucher Program is helpful, as it provides more freedom to choose where you'd like to live. However, it's important to note that wherever you choose, the company managing the property must be an approved property owner. A local Public Housing Agency (PHA) typically determines the amount of assistance provided. The PHA will assess local market prices in your area and set a base voucher amount. Then, 30% of your monthly income will be deducted from the awarded voucher amount to determine the monthly assistance you'll receive.

As a renter, you can decide whether to rent somewhere that costs the amount awarded or rent another that's more expensive, assuming they can afford to cover the difference.

The eligibility requirements for this program include:

• Using a Section-8 approved complex
• Meeting your specific state's low-income requirements
• Providing relevant references
• Pass a background and/or credit check

As with most government-subsidized housing, it's important to remember that you may have to wait several months before you can secure an apartment with rental payment assistance. 

Rental Assistance in Rural Areas

If you live in a rural area, you can apply for a private subsidized housing program. This particular program is awarded by the United States Department of Agriculture (USDA) and allows landlords to receive tax incentives in exchange for offering low-income families discounted rental prices. 

Eligibility requirements for this program include:

• Your monthly income level is at or below the USDA's income limit for your area
• Providing evidence that your monthly rent is above 30% of your monthly income
• The property owner must also meet requirements, which can include a background or credit check

To learn more about the Rural Rental Assistance program, you should check out the USDA Service Tool and reach out to your local USDA Rural Field Development office. 

If you've ever been in a bind, stuck thinking that you can't make your next rent payment, or trying to figure out how to buy a home as a first-time home buyer. There are local programs that can help, and one of these programs may be able to provide you with the help and financial assistance you need. Whether it's a temporary re-occupancy program or even possibly a grant for down payment assistance, the local housing authority can provide you with the ability to become self-sufficient.

Talk to your local Housing Authority agent today and see which programs best fit your needs.