Buying a Home as a Single Parent

According to the National Association of Realtors, since 1981 there has been a steady rise in single women home buyers versus a drop in the share of Americans who are married.

Single Women Far Outpacing Single Men as Homebuyers

In fact, single females even double the number of single males at 19% to 9%.                               

This holds for all racial and ethnic groups. Moreover, women have outpaced men in educational gains among heads of household. It’s no wonder there’s been an increase in headship and homeownership rates among single women, many who are now considered a head of household.

Do You Qualify to Be a Head of Household (HOH)?

According to Investopedia, Head of household is a filing status on tax returns used by unmarried taxpayers who are unmarried and pay more than half the cost of supporting and housing a qualifying person.

This status can offer greater tax benefits than the status of single and even married filing separately. Now here’s where it gets interesting and tricky all at the same time.

To be considered unmarried by the IRS, the person must be single, divorced or regarded as unmarried even if you are married. See? We told you it gets tricky.

What that can mean is that if you are still legally married, you could be regarded as unmarried if you did not live with your spouse for the last six months of the tax year.  

If all of this sounds complicated, that’s because it is. For more on this please consult with a tax professional.

Why Are More Single Women than Single Men Choosing to Buy?

Well, there’s never a clear-cut answer for such a complex decision. But according to the National Association of Realtors, single women buyers are more likely to purchase a home with a child under the age of 18 and are more likely to purchase a multi-generational home (housing adult siblings, adult children, and/or grandparents).

These family obligations may make purchasing a home more attractive to a single woman buyer as she has the need for stable housing on a continual basis.

But here’s the rub. Women home buyer’s household income is $65,000 compared to single men at $78,000 giving them more buying power than single women.

Fortunately There are Many Affordable Lending Options

There are a lot of home loan options available for low-income households. For example:

FHA loans are backed by the government so they’re one of the easiest types of mortgages to qualify for. At Embrace, we accept FICO® scores of 580 and above, along with down payments as low as 3.5%. On top of that, the down payment and closing costs can often be covered with gift funds. An FHA loan can be ideal for first-time homebuyers or borrowers who have challenging credit.

USDA loans are for homes in an area designated as rural by the U.S. Department of Agriculture, a USDA loan is often the way to go. And believe it or not, many suburban neighborhoods qualify as rural. With our USDA loans, you can enjoy zero down payment, below-market mortgage rates, and no private mortgage insurance.

These direct home loans are available for very low- to low-income borrowers who were approved for a mortgage payment stoppage due to COVID-19. You must meet or fall below the income limits for your area to be eligible. Your credit score is not a factor unless you have substantial federal debt.

VA loans are for veterans and those in the military. A VA loan is easier to qualify for than other types of mortgage loans, and it requires little or no down payment. Because VA loans are backed by the Federal Government through the U.S. Department of Veterans Affairs (VA), they also have better interest rates than traditional mortgages.

Is there is Down Payment Help or Even Lower Mortgage Payments?

Indeed help is available, however such assistance would be administered by a local agency, charity or service.

For instance, the government sets aside funding through the U.S. Department of Housing and Urban Development (HUD) to support housing initiatives. HUD offers over 20 grants related to housing and homeownership. Apart from national programs, grants can also be available at the state and local levels.

There’s a HUD program that encourages “good neighbors” to purchase homes in areas in need of revitalization. Available to law enforcement officers, teachers, firefighters and emergency responders, the Good Neighbors Next Door program can discount up to 50% of the home’s list price.

There’s also the National Homebuyers Fund. They provide grants for down payment and closing cost assistance. Buyers may be eligible for up to 5% of the home’s value in a grant.

Funds are available through different loan programs, including conventional and FHA loans. You do not have to be a first-time home buyer.

Embrace the Right Loan Officer.  It Can Make all the Difference.

There are so many options and twists and turns out there. It’s never a good idea to navigate those waters alone.

At Embrace, we’re right with you at every step from application to underwriting to closing, to make the process easy.

Think of us as your local scouts. We simply will not rest until we find the right program to meet your unique lending needs. We live in your neighborhood; we know our local market conditions. Can a lending app do that?

But that doesn’t mean, we don’t love technology too. In fact, our ingenious new mobile app eSNAPP is revolutionizing the way borrowers get home loans.

We know single mom really means super mom. And you are super busy. Now, you can take care of the loan process from anywhere, anytime. Upload documents in a snap. Sign disclosures in a snap. Even pay for your appraisal — in a snap.

 Contact your local Embrace Loan Officer and let us help you into your dream loan.