real estate

Mortgage help for disabled persons

Steve McLindenq_v2.gifDear Real Estate Adviser,
I am on Social Security disability benefits. Do you know how I can obtain special financing for buying a single-family home via the disability route? There are programs for other special interest groups, but I can't seem to find one for the disabled. Thanks.
-- Honus

a_v2.gifDear Honus,
There is some help out there, but it's kind of hit-and-miss. Moreover, because most people with disabilities get a large amount of their income from Social Security, lenders often count this as a secondary income source instead of a primary source, making it a challenge to qualify for traditional mortgages and creating a void for the disabled.

Even so, here's a battery of resources that might net you some housing help. If you're disabled and your family falls in the low-to-moderate income range, you may get federal housing assistance from the U.S. Department of Housing and Urban Development, or HUD, via housing choice vouchers. Also called a "Section 8" program, this housing-assistance agency offers varying levels of vouchers for disabled homeowners and renters. In many cities, the local public housing agency owns and/or controls blocks of for-sale units, for which it can offer significant financial help. Unfortunately, many cities don't have Section 8 housing or related assistance. Here's a list of local housing agencies.

Similarly, the Fannie Mae HomeChoice initiative helps pay most closing costs and part of the down payment on a property for low-to-moderate income folks, but a disabled borrower's income can't exceed 115 percent of the area's median income. Fannie Mae has recently relaxed some eligibility restrictions. Here are more details.

Some states and counties offer big breaks on property taxes. In Texas, for example, most disabled adults qualify for a special homestead exemption that substantially helps with the property-tax bill. Texas school districts provide an additional $10,000 disability exemption. Nationally, disabled vets get an additional homestead exemption.

A few states offer low-interest mortgages, typically for maximum home purchases of around $100,000. The National Association of Realtors lists more details on the still-small number of mortgage-lending programs that states offer to the disabled.

An organization called the Center for Independent Living has a state-by-state listing of local chapters that offer a range of assistance for the disabled, including housing services. The organization will gladly steer you to other helpful local resources and programs. And as a final resource, there's an inexpensive new book online, about $10 to download, called "Disability Empowerment: Free Money for Disabled Americans to Make Dreams Reality" that runs through housing options for the disabled in detail.

Good luck. I hope you fit into a program!

To ask a question of the Real Estate Adviser, go to the "Ask the Experts" page, and select "Buying, selling a home" as the topic. Read more Real Estate Adviser columns and more stories about mortgages.

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