There are more American Families today who rent their homes than those who own them, reports USA Today. And those numbers keep growing. In fact, today more people rent their homes than at any point in the last 50 years (Pew Research). And that’s a clear sign of how difficult it has become to buy a home these days. While there are several factors in play, it’s money that remains the biggest issue in choosing renting vs. buying. If you are currently facing the same choice, you might have some financial options that will allow you to afford a home, even if you can’t do this now.
How to Buy a Home When You Can’t Afford One: 4 Options
1. Get down payment assistance
Down payment is often the biggest issue that prevents a family from buying a home because saving the money for it takes a very long time. However, today you can find multiple programs that offer aid with this particular part of mortgage.
Look for those through charities and government agencies. Don’t mistake these programs for zero-down payment loans as this type of financing runs on different terms.
You can also try to seek down payment assistance from your employer or even the local community organizations. As homeowners are more likely to take good care of their property than renters, the communities and municipalities often offer assistance to encourage people to buy and settle.
2. Go rural with USDA loans
You might not be able to afford a home in the city, but have you looked outside of it? The US Department of Agriculture offers some great loan options that have zero down payment, according to USDALoan.com. They also offer good interest rates and don’t forget that property in the country is often cheaper by default. The benefits of living closer to nature cannot be discarded as well.
The best thing about USDA loans is that they come in tiers depending on your income. This means that even a low-income family should be able to get a good deal on this financing. And if you qualify for a Direct Loan, you won’t need to go through private lenders and borrow money directly from the government.
3. Find a loan program based on your job
Everyone knows about VA loans, which are reserved for veterans. However, they aren’t the only group of people eligible for some affordable financing. The Good Neighbor Next Door program, for example, offers some very good terms to nurses, teachers, and first responders who are looking to buy a home.
Don’t fit into any of these categories? Look for more!
While you might not find a financing program supported by the government, you can find some specialized charities.
4. Look for help from community development corporations
Community development corporations are many and each of them is unique, so you’ll have to look into every offer within your reach. These corporations advocate sustainable development and often have rentals as their main offer.
However, quite a few of them are also provide affordable housing as well. You’ll need to look for them in your area and contact them directly to discuss your situation. As these corporations run on the local level, their terms can vary greatly. On the good side, they have a lot of flexibility, so you might get a great deal.
Of course, there is also always an option to try for a Fannie Mae or Freddie Mac loan. However, with the abundance of choices available, you should try to find better deals. And don’t forget to pick a mortgage that you will be able to adjust in a few years as this can make paying off your debt much easier.