Buying a home as a single parent can be challenging. Right now, it may even seem like an impossible dream. However, single homeownership is on the rise and single-female homeownership is actually outpacing the rise in single male homeownership. What’s more, 38.4% of homeowners are single, highlighting an improving economy and buyers’ willingness to look for alternative options for overcoming rising housing costs.
Here are just a few ways you can join the ranks of single homeownership, regardless of your current financial situation.
1. Save, Save, Save
The first step and best way to buy a home is to save your money. You’ll want to make the largest downpayment you can afford to minimize interest and saving can help you do just that.
Begin by cutting unnecessary spending. Instead of frequenting the local coffee shop, brew your own joe at home. Forego bowling or the local arcade for a game night at home with friends. Start slow and continually question whether or not your everyday purchases are essential. Remember your goals and prioritize them and, eventually, you’ll begin to see your savings account grow.
2. Create a Monthly Budget
Creating a monthly budget will also help you stay on track and achieve your savings goals. Access your banking statements online and take an honest look at your finances. Download a spreadsheet of your account or use an app to help you categorize your spending. Then, create a budget that will help you reach your goal to own a house.
A budget won’t work unless you stick to it. Keep yourself on track by using cash only to make your purchases. If you manage to stick to the budget, reward yourself with something small at the end of the month. Celebrating those little milestones will motivate you as you work towards your dream.
3. Pay Down Debts
In addition to saving, you should also prioritize paying down your debts. Whether they be from student loans or credit cards, your total debt should account for less than 43% of your pre-tax income. Use a debt-to-income calculator to determine this percentage, then make a conscious effort to minimize it.
The quicker you pay off your debt, the less you’ll pay in interest, thereby saving you more money in the long run. Plus, you may be able to raise your credit and qualify for a better mortgage loan.
4. Apply for a Loan
Single moms often have a more difficult time qualifying for some mortgage loans. However, there is still hope for those looking to get a home loan if you’re willing to put in the work to find one.
Begin your search by checking with the local housing authority to see what’s available to you as a single parent. Often, their website will be able to tell you what homeownership programs and loans are accessible in your city or state. Low-income programs through USDA Rural Development and the Federal Housing Association are more flexible on credit and downpayment requirements. Plus, some programs may consider you a first-time homebuyer, making you eligible for special grants and tax benefits.
5. Search for an IDA Program
An Individual Development Account is another prospective option that may help single parents purchase a home. This asset-building strategy enables low-income buyers to save and invest with return potential. Typically, you will set up an IDA savings account through a community organization and the program will match you with somewhere between $1 and $4.
However, you must save for a set period of time before you may withdraw and use it. Moreover, most programs come with a match limit usually around $4,000. Find ones with higher caps in your area by searching program directories at Prosperity Now and the Assets for Independence Resource Center.
6. Partner With Habitat for Humanity
Habitat for Humanity can also help you obtain housing through their Habitat homeownership program. Whether you’re dealing with unpredictable rent increases, an unsafe neighborhood or lack of affordable financing, you can apply for a Habitat house.
To qualify at the local level, you must demonstrate a need for affordable housing, demonstrate your ability to pay an affordable mortgage and be willing to put in sweat equity to help build their home and others in the homeownership program. Sweat equity may also include taking financial education and budget-planning classes or volunteering at Habitat ReStore.
Know Your Options
Buying a home as a single parent can be a very challenging yet rewarding experience. However, you must be willing to ask for and receive help. If you know you can’t achieve this dream by yourself, begin investigating all available options that might be able to assist you. From USDA address eligibility programs to non-profit organizations, there are dozens of financing options available to you and your family.
Know your options, ask for help and be honest with those willing to aid you in this long but fulfilling journey. When you finally set foot in your new home, you’ll be more than grateful for those that helped you along the way.
I’m a 20-something stay-at-home mother and wife. I have an amazing husband, a beautiful daughter, two loving dogs, and a lazy cat. I wouldn’t change my life for anything! I love to read, listen to music, cook and blog!
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