Government Programs For Low Income Families To Buy A Homes
While it certainly can be challenging to purchase a home on a lower-than-average income, there are a variety of loan options and programs available that help make homeownership more attainable for low-income folks.
government programs for low income families to buy a homes
The housing choice voucher program (sometimes referred to as Section 8), which provides rental assistance to very low-income families, has a program that allows these same families to use their vouchers to purchase and own their own homes. This program is called the Housing Choice Voucher homeownership program.
Though there are some differences between these two programs, they both have similar requirements, including that borrowers make no more than 80% of the median income for their area and take a homeownership education course prior to purchasing.
Today African-American incomes on average are about 60 percent of average white incomes. But African-American wealth is about 5 percent of white wealth. Most middle-class families in this country gain their wealth from the equity they have in their homes. So this enormous difference between a 60 percent income ratio and a 5 percent wealth ratio is almost entirely attributable to federal housing policy implemented through the 20th century.
African-American families that were prohibited from buying homes in the suburbs in the 1940s and '50s and even into the '60s, by the Federal Housing Administration, gained none of the equity appreciation that whites gained. So ... the Daly City development south of San Francisco or Levittown or any of the others in between across the country, those homes in the late 1940s and 1950s sold for about twice national median income. They were affordable to working-class families with an FHA or VA mortgage. African-Americans were equally able to afford those homes as whites but were prohibited from buying them. Today those homes sell for $300,000 [or] $400,000 at the minimum, six, eight times national median income. ...
So in 1968 we passed the Fair Housing Act that said, in effect, "OK, African-Americans, you're now free to buy homes in Daly City or Levittown" ... but it's an empty promise because those homes are no longer affordable to the families that could've afforded them when whites were buying into those suburbs and gaining the equity and the wealth that followed from that.
The white families sent their children to college with their home equities; they were able to take care of their parents in old age and not depend on their children. They're able to bequeath wealth to their children. None of those advantages accrued to African-Americans, who for the most part were prohibited from buying homes in those suburbs.
Public housing began in this country for civilians during the New Deal and it was an attempt to address a housing shortage; it wasn't a welfare program for poor people. During the Depression, no housing construction was going on. Middle-class families, working-class families were losing their homes during the Depression when they became unemployed and so there were many unemployed middle-class, working-class white families and this was the constituency that the federal government was most interested in. And so the federal government began a program of building public housing for whites only in cities across the country. The liberal instinct of some Roosevelt administration officials led them to build some projects for African-Americans as well, but they were always separate projects; they were not integrated. ...
Benefits.gov allows you to compare your eligibility for over 1,000 state and federal benefit programs. Learn more about how to use the Benefit Finder to connect you to the government benefits you need.
An entire county or a census tract in which at least seventy percent (70%) of the families have a Household Annual Income that is eighty percent (80%) or less of the state-wide median family income, or an area designated by the State as an area of chronic economic distress and approved by the Secretary of the U.S. Department of Housing and Urban Development and the Secretary of the U. S. Department of Treasury.
The federal government manages safety net programs, also known as welfare programs, to aid low-income Americans and to protect families from poverty. These programs are essentially government subsidies that help offset the costs of everything from health insurance to food to education, so that families in need can save their resources to help further their own economic growth.
Or, in simpler terms, there are a whole range of federal programs out there to help low-income people so that there basic needs are met. That way they can focus on their own security, growth, health, safety and development. The federal government provides the funding for welfare programs, while states administer them and provide additional funds.
Recipients of these kind of government benefits must prove their income is below a set amount, which is some percentage of the federal poverty level. Most programs also require you to be a United States citizen or an eligible non-citizen. And many programs have state requirements based on family size and details about combined family income.
Through executive order, the Trump administration has called for the introduction of work requirements to receive some of these welfare benefits. President Trump doubled down on this concept, tying them into the 2020 fiscal budget he introduced. For now, the government agencies and departments that administer these programs are developing ways to introduce work requirements into many of these programs.
Housing Assistance helps low-income families, seniors, and people with disabilities get into affordable private or government-owned rental housing. The Housing Choice Voucher Program gives certificates to rent approved units. The subsidy allows recipients to pay no more than 30 percent of their income. It provides 1.2 million units of public housing and local agencies administer it to 2.2 million renters. This is the old Section 8 program. The Public Housing Agency also allows some families to use the voucher to purchase a modest home.
Administered by the U.S. Department of Health and Human Services (HHS), TANF programs provide cash for a limited time to low-income families working toward self-sufficiency. TANF may also offer non-cash benefits such as child care or job training.
Head Start is a free or reduced cost program that provides comprehensive early childhood education, health nutrition, and parent involvement services. This program is offered to low-income children, from birth to 5 years old, and their families. In 2016 the program serviced nearly 1 million children and 1.4 million child care programs. Head Start is also administered by the Department of Health and Human Services.
The Lifeline program run by the Federal Communications Commission (FCC) helps low-income individuals and families get discounted landline and cell phone service. Lifeline provides a monthly discount of up to $9.25 on monthly telephone service, broadband Internet access service, or voice-broadband bundled service purchased from participating providers. Subscribers can receive a Lifeline discount on either a wireline or a wireless service, and you can get one Lifeline service per household.
Lifeline is available to eligible low-income consumers in every state, commonwealth, territory, and on Tribal lands. To be eligible, you must have an income at or below 135% of the Federal Poverty Guidelines or participate in certain federal assistance programs, such as the Supplemental Nutrition Assistance Program (SNAP), Medicaid, Supplemental Security Income (SSI), Federal Public Housing Assistance (FPHA), Veterans Pension and Survivors Benefit, or Tribal programs (and live on federally-recognized Tribal lands). You can check online to see what providers offer Lifeline services in your area and see if and what kind of benefits you might qualify for.
Diana Guzman is a resident of Casas de la Viña, a 56-unit affordable apartment rental community that serves low-income families and farmworkers. The mother of two boys, Diana moved to Casas de la Viña when she needed to find a new home after the death of her husband.
Casas de la Viña is one of several properties owned by Self-Help Enterprises, an organization that develops affordable housing to serve the needs of low-income Central Valley residents. One of the many ways that Self-Help Enterprises supports low-income families is by helping them save money on their electric bills through improvements made throughout their properties.
Designed to promote economic development, the U.S. Department of Agriculture (USDA) mortgage program assists low- to moderate-income households with the purchase of homes in rural areas. The loan can also be used to repair and renovate a property, make a property more energy efficient, or even install essential household appliances.
Homebuyers can also look to their city or state governments for assistance. These homeownership assistance programs are typically designed for first-time and low to moderate-income buyers. They offer competitive mortgage programs, down payment and closing cost assistance, and home buying education. Check your local or state housing authority to determine what types of programs are available and the eligibility requirements for each.
The National Homebuyers Fund is a non-profit organization that offers financial assistance programs for homeowners and homebuyers. Perhaps their most prominent is their down payment assistance grant, which can provide up to five percent of the mortgage loan. The organization also manages down payment assistance, mortgage credit certificate (MCC), and energy efficiency programs for California residents, in partnership with the Golden State Finance Authority. The National Homebuyers Fund can provide up to a $10,000 down payment for any homebuyer with low to moderate income. The National Homebuyers Fund requires:
The HomePath Ready Buyer program is administered by Fannie Mae, a government-sponsored entity that offers mortgage options that benefit low- to moderate-income households. The homeownership assistance program targets first-time buyers, who are required to complete an online educational course. Upon completing the course, buyers are eligible to receive three percent toward closing costs when purchasing a foreclosure home owned by Fannie Mae. Buyers can also make a down payment that is as low as three percent. 041b061a72