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Mortgage programs for disabled borrowers

Are there mortgage programs for disabled borrowers?

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
, Trusted Mortgage Expert with 45+ Years of Experience

There are multiple mortgage programs that may be applicable to borrowers with disabilities including the HomeReady Mortgage Program, the Home Possible Mortgage Program, FHA Mortgage Program and HUD Section 8 Housing Voucher Program.  Although these mortgage programs are available to all eligible borrowers, they offer benefits that may be especially applicable to disabled borrowers.  These programs are typically provided by participating lenders, frequently in collaboration with HUD-approved state or local housing commissions.  In some cases, state or local housing commissions offer their own mortgage assistance programs for disabled borrowers, including down payment grants, community or affordable second mortgages and closing cost assistance programs.

In short, we recommend that you contact local lenders as well as your state or local housing commission to understand the mortgage assistance programs available to disabled borrowers.  You can review lenders in your area by clicking MORTGAGE RATES and contact them to determine if they offer the programs outlined below or other programs for disabled borrowers.  You can find your state or local housing commission by visiting the HUD web site. Simply select your state from this web site to learn more about HUD resources that may be helpful to you.

HomeReady Mortgage Program.  The Fannie Mae HomeReady Mortgage program enables buyers to buy a home with a down payment as low as 3.0% of the property purchase price and no minimum borrower financial contribution.  The HomeReady Program also permits lenders to consider non-traditional sources of income from non-occupant borrowers such as relatives, non-borrower household members and boarders which may make it easier for you to qualify for a mortgage.  Borrowers can combine a HomeReady mortgage with a down payment grant or "community second" mortgage to purchase a home with no personal financial contribution.

Home Possible Advantage Mortgage Program.  The Freddie Mac Home Possible Advantage program enables home buyers to buy a home with a down payment as low as 3.0% of the property purchase price and no minimum borrower financial contribution.   The Home Possible Advantage program potentially offers a reduced interest rate for borrowers with low incomes or for properties located in certain areas.  Borrowers can combine a Home Possible mortgage with a down payment grant or "affordable second" mortgage to purchase a home with no personal financial contribution.

FHA Mortgage Program. The FHA Mortgage Program enables you to buy a home with a down payment as low as 3.5% and a credit score as low as 580. Borrowers can combine an FHA mortgage with a personal gift, down payment grant, closing cost assistance program or qualified second mortgage to purchase a property with no personal financial contribution.

HUD Section 8 Voucher Program. The HUD Section 8 Voucher Program is the federal government's program that assists low-income families, the elderly and the disabled afford a home in the private market. The Section 8 Voucher Program is typically used to provide rental assistance but the program may also be used in some cities to help participants purchase a home, under certain circumstances.  The HUD Section 8 Voucher Program is offered through state or local housing commissions.

The HomeReady, Home Possible and FHA mortgage programs are offered by participating lenders such as banks, mortgage brokers and credit unions.  You can use the FREEandCLEAR Lender Directory to search for lenders in your state that offer these programs.

The HUD Section 8 Voucher Program, down payment grants, community or affordable seconds and closing costs assistance programs are typically provided by state or local housing commissions.  

In addition to contacting HUD-approved housing commissions and reviewing the mortgage programs outlined above, there are some additional organizations that offer programs that may be applicable to borrowers with disabilities. I have provided a brief summary of the American Association for People with Disabilities (AAPD), Habitat for Humanity and NACA below. These three organizations may offer programs or resources to help you buy a home.

American Association for People with Disabilities (AAPD). AAPD works to improve the lives of people with disabilities by acting as a convener, connector, and catalyst for change, increasing the political and economic power of people with disabilities.

Habitat for Humanity. Habitat’s vision is of a world where everyone has a decent place to live. Habitat works toward its vision by building strength, stability and self-reliance in partnership with people and families in need of a decent and affordable home.

NACA Mortgage Program. NACA is a not-for-profit organization that offers mortgage programs designed to make home ownership more attainable. The NACA Mortgage Program enables borrowers to purchase a home with no down payment and no closing costs. We provide a detailed overview of the NACA Mortgage Program on FREEandCLEAR and you can contact NACA by visiting the NACA web site.

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About the author

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR. More about Harry

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