Yes, you may be able to buy a home on disability income if that income can be documented and you meet the lender’s other requirements. You may also have access to programs that help with affordability, down payment needs, or accessibility-related housing goals.
This article explains how mortgage qualification works with disability income, what types of assistance may be available, and what to consider when planning for location, services, and home accessibility before you buy.
Not only does the federal Fair Housing Act protect your rights against being denied a mortgage loan because of your disability, but you are also protected from discrimination, in general, with the Disabilities Act. That said, if you are looking to purchase a home on disability income, there are a few things to keep in mind when embarking on the home buying process.
As long as you receive sufficient regular income that can be verified and you meet all other lender requirements including credit, assets, etc., then there should be no problems with securing financing for your dream home. As briefly mentioned, there are programs available for disabled individuals that can help with the house-buying process. Moreover, a substantial income and a perfect credit score are not necessary for you, or any prospective buyer for that matter, to be able to get a home loan. Thus, even if you have less than desirable credit score and your income is limited to just your disability income, you can still qualify for a mortgage.
By now, you are likely aware that there are a variety of programs available to assist you in purchasing a home. Of course, to qualify for these programs, you must be receiving disability income. That said, Fannie Mae’s Community HomeChoice Program, the Section 8 Homeownership Voucher Program, and the Habitat for Humanity program are just a few of the options available to you. Plus, if you are a disabled veteran, you can be approved for a VA loan along with several VA grants such as the Special Housing Adaptation (SHA) grant and Specially Adapted Housing (SAH) Grant. These particular VA grants help cover the costs for making a home accessible for disabled veterans. What’s more, many of the above-mentioned options also include down payment assistance or require little to no down payment.
Before you begin the actual process of buying a home, it is important to clarify what your needs are in terms of disability. For instance, you may need certain services, proximity to public transportation, and so on. Thus, it is beneficial to figure out what areas can accommodate. Potential buyers should also keep in mind the house’s physical layout, avoiding things like narrow stairwells or long driveways if needed.
Once you have established your needs, then the next step is to determine how much you can afford so you will know what type of home or neighborhood you are looking for. Here, the standard pre-approval process can help you figure out your potential budget.
Overall, as a disabled person, you are protected by the Fair Housing Act that prohibits housing providers—such as lenders, sellers, and real estate agents—from discriminating against you in any area connected to the home-buying process. You are also permitted to make reasonable modifications to the property. Consequently, the entire process is and should be no different than if you were using another source of income to qualify for a home loan.
In addition to expert mortgage assistance with your home buying budget, it is highly recommended that you take advantage of the Department of Housing and Urban Development (HUD) approved housing counselors—if available. Typically, HUD housing counselors are available in every state that is certified to help disabled individuals buy a home. This is particularly helpful if you have specific questions related to your personal needs.
Plus, HUD counselors and a knowledgeable mortgage professional can also point you toward relevant financial assistance programs. This can be extremely helpful when it comes to saving up for a down payment. Clearly, disability income does not always afford a person extra funds that can be scrolled away for a down payment. But that is okay as there are financing options to help you meet down payment requirements. For example, Fannie Mae’s HomeReady mortgage offers eligible borrowers down payments as low as 3%, and no minimum personal contribution is required. Note, grants, the seller covering the down payment, and the IDA program/down payment savings account are also other down payment options for those on disability.
Ultimately, after figuring out your budget, needs, and down payment, then the home buying process is pretty standard—find an experienced real estate agent, start looking for a suitable home, make a purchase offer, negotiate as needed, get a home inspection, secure homeowner’s insurance, and close on your home.
Sammamish Mortgage can help. We serve clients across Washington, Idaho, Colorado, Oregon, and California. Since 1992, we’ve been providing several mortgage programs and products with flexible qualification criteria to borrowers across the Pacific Northwest. Visit our website to get an instant rate quote or to use our online mortgage calculator. Or, reach out to us if you are ready to get pre-approved for a mortgage.
Yes, you may be able to buy a home on disability income if that income can be documented and you meet the lender’s other requirements, such as credit, assets, and overall qualification guidelines.
Yes. Disability income can count toward mortgage qualification when it is regular, sufficient, and verifiable under the lender’s guidelines.
It may be used if the lender can verify it and it meets the loan program’s income requirements. The key issue is not the source alone, but whether the income is documented and acceptable under underwriting guidelines.
Lenders generally need documentation that verifies the disability income and shows that it is received regularly. They also review the same broader qualification factors they use for other borrowers, including credit and assets.
Possibly. A perfect credit score is not required, and some buyers may still qualify even with less-than-desirable credit if they meet the lender’s other standards and have acceptable documented income.
Yes. Programs mentioned include Fannie Mae’s Community HomeChoice Program, the Section 8 Homeownership Voucher Program, and Habitat for Humanity. Disabled veterans may also be eligible for VA loans and certain VA housing grants.
They may. If a program allows qualifying disability income and you meet its other rules, disability income can work alongside homebuyer assistance options, including programs that help with affordability or down payment needs.
Yes, in some cases. Assistance may come from grants, seller-paid contributions when allowed, or savings-based assistance programs. Some mortgage options may also allow low down payments for eligible borrowers.
Accessibility should be considered before you buy, including the home’s layout, transportation access, and proximity to needed services. Disabled veterans may have access to VA grants such as the Special Housing Adaptation grant and the Specially Adapted Housing grant to help with accessibility-related changes.
Lenders cannot deny a mortgage because of a disability, and federal fair housing protections prohibit discrimination in the home-buying process. If the income is acceptable under the lender’s guidelines and the borrower meets the other requirements, disability income can be used to qualify.
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