Other Free Encyclopedias » Online Encyclopedia » Encyclopedia - Featured Articles » Featured Articles: Mobile New Phone - Getting a New Mobile Phone to Department Of Motor Vehicles New York - How to Save Time and Money at the New York DMV - Youth Resources

Low Income Loan - How to Get a Low Income Loan

home government available housing

People in low income situations are often those who are most in need of a loan for housing or personal expenses. Unfortunately, a low income loan can be extremely difficult to find. This was not always the case, as the housing crises of 2006 and subsequent worldwide recession have shown. In today’s economy, lenders need to see regular, steady income well-above living and debt repayment expenses.

In the first few years of the 21st century, a few unscrupulous lenders began issuing personal, home, and auto loans to just about anyone who asked. These lenders collected a fee for each loan they approved, so the more loans they wrote, the more money they personally collected. A few lucky, responsible people trying to turn their life around benefited from an easy-to-get low income loan at the time. Most of the other borrowers, misled by the bad information given them by the lenders out of personal greed, found themselves unable to meet the repayment schedule of the loan when the rate adjusted upward in subsequent years.

When borrowers began to default on their loans, the situation ushered in a worldwide recession and most of the doors for a low income loan were closed. Among the only sources of a low income loan left available is through government-sponsored programs.

In the United States, government programs to help people obtain a low income loan are still available. The objective of these programs is to provide clean, safe, and sanitary, yet modest housing for individuals and families with incomes ranging from very low to moderate levels. The low income loan may be available in the form of a direct loan or a guaranteed/insured loan.

Eligibility requirements for a government low income loan vary by the exact program. Two of these types of programs available for a low income loan are the Housing and Urban Development First Time Homebuyers Program and the U.S. Department of Agriculture Rural Development Program. For the Rural Development Program, to be approved for a low income loan, families or individuals must qualify for one of three income levels: very low income is less than 50% of the median income for the area; low income is 50% to 80% of the area median income; moderate income is anything below 115% of the area median.

There are other eligibility requirements for a government low income loan. Even though borrowers can have a low income, they must still have an acceptable credit rating. Low income loans do not necessarily mean they are available for people with bad credit. Usually, the borrower must also be unable to obtain credit from private lenders.

Once a low income loan for housing is issued, it can be used to buy an existing home of modest value. In some cases it may also be possible to use the low income loan to build a new home or improve an existing primary home already owned by the borrower. In extremely rare circumstances, a new low income loan may be used to refinance a home without improvements.

Each area has a limit on the maximum value of the home that can be purchased, built, or improved upon. Additionally, homes must meet safety and sanitation requirements, and the home must be in a qualifying location.

Although a government low income loan is not the only type available, these are the most common today. If you do not qualify for a government low income loan, chances are that you will not find an acceptable loan from a private lender, but you should never stop looking. Some home owners can be pleasantly surprised at the pay-off received due to their diligence in seeking a low income loan.

Tv Listing Uk - How to Get a TV Listing in the UK - Where to get TV Listings for UK Television [next] [back] Swedish English Translation - How to Get a Good Swedish English Translation

User Comments

Your email address will be altered so spam harvesting bots can't read it easily.
Hide my email completely instead?

Cancel or