Individuals who are interested in purchasing a low-income home should contact their local housing authority to inquire about their low-income housing voucher program. Home-ownership vouchers allow eligible low-income individuals to use a HUD subsidy to pay a portion of their rent or monthly mortgage payment.
Individuals who are considered to be a low-income earner can rent or buy a home through federal, state and local programs that exist to help prospective low-income homeowners. Most programs cater to individuals and families at various income levels, with most low-income applicants qualifying for home-buying assistance if their income is significantly less than the area's median income. These limits vary from area to area, so qualifying in one area does not necessarily mean the applicant is going to qualify in another.
Individuals looking to purchase a low-income home should contact a real estate agent regarding purchasing a HUD home. HUD has a Good Neighbor Next Door program, where low-income borrowers can secure a HUD home in a federally-designated revitalization area at a 50 percent discount.
From there, individuals should consult with a lender who offers FHA-insured loans. FHA products do not use low-income requirements, but they do provide a more liberal underwriting process as compared to conventional loans. FHA lenders can accept debt-to-income ratios as high as 41 percent.