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The Real Estate Adviser

Disabled get help to live American dream

Dear Steve:
I am on Social Security disability. Is there a program that would help me buy a home? My income isn't very much; I am 43 years old, and married with one child.
-- Searching for the American dream

Dear Searching:
There are programs, but obviously not enough of them.

Federal housing data indicates the overall home ownership rate in the U.S. is more than 65 percent, but it's less than 5 percent for people with disabilities who live on Social Security and less than 2 percent for those who are disabled and head of household, say advocates for the disabled.

But don't lose hope. If you're exhaustive in your search, you might find the assistance you need by exploring as many options as you can to see what fits your situation.

Let's begin on the national level.

The "Home Choice" program of Fannie Mae, which provides financial products and services for low, moderate and middle-income families, offers programs for the disabled featuring low down-payment requirements (usually $500), and payment of most closing costs. Go to fanniemae.com for more information, and then contact a local lender.

The U.S. Department of Housing and Urban Development's Section 8 Homeownership Program, enacted in 2000, allows people with disabilities to apply their monthly rent vouchers toward the monthly mortgage payments for a home. The catch is that local public housing authorities must choose to participate in the program. And many don't.

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"Unfortunately, these (federal) programs are very limited," says Becca Vaughn, co-chair of the National Council of Independent Living's housing committee.

To see if your state participates, and to see what other programs are available, contact your local Center for Independent Living. A state-by-state directory of CIL's can be found at this Web site.

A few states have their own custom programs, such as Maryland, which lends money directly to people with certifiable disabilities, up to a maximum first-mortgage value of $100,000 ($120,000 in the greater Washington D.C. area), at 3 percent interest, up to a 40-year term. The total income of all household members must not exceed $40,015 in this program. Regrettably, those programs are rarities.

Many state first-time homebuyer programs offer relatively liberal lending terms, but they are usually geared toward buyers who earn 60 to 80 percent of the median income, says Vaughn. Most people with disabilities fall below the 30 percent level and can't qualify.

Through the Community Reinvestment Act, some municipalities can offer limited federal grant monies for low-income home ownership, Vaughn says. It's worth a call to city hall.

One of the best places to start for advice on such home-loan programs is your local lender, Vaughn advises. "They can sit down with you and run through your options and finances and it won't cost you anything."

You can find other helpful Web information at new-horizons.org, which has a home-buying guide for people with disabilities, and at the national homepage for the Independent Living Research Utilization program.

Good luck to you and your family.

-- Posted: Feb. 7, 2004

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