The Complete Guide to Home Loans for People with Disabilities

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If you’re part of the 25% of U.S. adults living with a disability, you’re likely used to overcoming obstacles. However, when it comes to buying a home, the process may seem daunting. Renting may not be an option due to the lack of necessary accommodations, so buying is often the best choice to ensure your home fits your needs.

While securing a mortgage and buying a home has its upsides, there are also some potential risks to be aware of. First off, you are responsible for all maintenance and repairs. You must either perform them manually, or pay someone to take care of it for you. Depending on your disability and income level, this may be especially difficult.

Lastly, it’s important to build up a solid amount of savings before buying. That way, you’ll be able to make the necessary changes to improve accessibility, and you won’t struggle to pay your mortgage or even lose your home. This would likely hurt your credit, making it harder for you to find a mortgage or landlord in the future.

Despite the challenges of being a homeowner, you’ll be glad to know that there are several mortgage options and financial aid programs available to make it easier. This guide is intended to provide all the information you need to secure a home loan while living with a disability.

Table of Contents

  1. How Does the Government Define a Disability?
  2. Federal Mortgage Programs for People with Disabilities
  3. Non-Profit Organizations Offering Financial Assistance
  4. Knowing and Understanding Your Rights
  5. Additional Resources

How Does the Government Define a Disability?

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The federal government defines a person with a disability as someone who:

  1. Has a physical or mental impairment that substantially limits one or more “major life activities”
  2. Has a record of such an impairment
  3. Is regarded as having such an impairment

Major life activities,” as defined by the the Department of Housing and Urban Development (HUD), include walking, speaking, hearing, seeing, breathing, working, learning, performing manual tasks, and caring for oneself. It also includes the operation of major bodily activities.

HUD gives examples of a “physical or mental impairment” such as orthopedic, visual, speech and hearing impairments, cerebral palsy, autism, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, diabetes, HIV, developmental disabilities, mental illness, drug addiction, and alcoholism.

These are just a few examples of types of disabilities. Any impairment that is found to impose a substantial limitation on a major life activity is considered a disability by the federal government and will qualify you for mortgage programs and financial assistance for people with disabilities.

Federal Mortgage Programs for People with Disabilities

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Thanks to numerous government-sponsored associations, there are plenty of mortgage programs available for people living with disabilities. Take some time to consider your options and find the one that best fits your needs.

Homeownership Voucher

HUD offers the Housing Choice Voucher (H.C.V.) homeownership program. If you don’t have a voucher, you will need to find a Public Housing Agency that offers an HCV program in your area. To help, visit their homeownership enrollments report. Keep in mind that waiting lists may be long.

An HCV covers the cost of the mortgage principal and interest, real estate taxes, homeowners insurance, mortgage insurance, utilities, maintenance and repairs, and the cost of making the home accessible.

These are the requirements to obtain a voucher:

  1. Your income must not fall below the minimum Supplemental Security Income benefit for an individual living alone.
  2. You must be a first-time homeowner.
  3. You must complete the required homeownership and housing counseling program.

Federal Housing Administration

The Federal Housing Administration (FHA) is a subsidiary of HUD that provides mortgage insurance on home loans from approved lenders. Use HUD’s tool to find approved lenders.

An FHA loan is generally less expensive than a regular home loan because it is backed by the US government. For this reason, it may be a good option for someone with a disability who has limited income.

Fannie Mae

The Federal National Mortgage Association (Fannie Mae) is a government-sponsored company. Its Community HomeChoice program is available in all states and offers the following housing aid for people with disabilities:

  • Low down payment programs
  • Mortgage-qualification aid such as lower debt-to-income requirements
  • Lenient credit evaluations
  • The ability to include rent payments from boarders in income calculations

USDA Single-Family Housing Direct Home Loans

The US Department of Agriculture and Rural Development offers special subsidized housing for low-income households. You don’t need a down payment and your interest rate can be as low as 1%, given you are:

  • Unable to find safe, sanitary housing
  • Unable to get an affordable mortgage
  • A citizen or eligible non-citizen
  • Not barred from federal loan programs
  • Not over the income limit for your area

Disabled borrowers can use these funds to help build the necessary accommodations needed depending on their disability.

VA Home Loans for Disabled Veterans

Disabled veterans have a multitude of housing benefits. You may be eligible for grants to help make your home accessible, including The Specially Adapted Housing (SAH) Grant and Special Housing Adaptation (SHA) Grant. In addition, if your disability is service-related, the following rules apply:

  • There is no minimum time you must serve before being eligible for a VA home loan.
  • You may be exempt from funding fees.

Help from State Agencies

Many states offer additional home-financing assistance specially for people with disabilities. Some examples include:

  • Maryland’s Homeownership for Individuals with Disabilities Program
  • Connecticut’s Home of Your Own Program
  • Disability and property tax exemptions for residents of Alabama

Visit disabled-world.com/disability/finance/american-home-loans.php to view the benefits available in your state.

Non-Profit Homeownership Programs for People with Disabilities

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While there are many federally-backed programs to help you find affordable housing, many non-profit organizations have stepped in to offer additional assistance. Here are just a few ways to find housing help outside of the government.

Habitat for Humanity

Habitat for Humanity offers affordable housing to lower-income individuals and families, which may include those with disabilities. There are hundreds of locations all over the U.S. Find one near you by entering your zip code here.

Here are some things to keep in mind when applying for a Habitat home:

  • You must demonstrate a need for safe, affordable housing.
  • You must participate in “sweat equity,” or be actively involved in the building of your home. This could include manual labor, homeownership classes, or volunteering.
  • You must be able and willing to pay an affordable mortgage, which will in turn help build more Habitat houses for others in need.

Rebuilding Together AmeriCorps

Rebuilding Together works with companies like Lowes and Sherwin Williams to offer home repairs and modifications for families with one or more disabled members. They offer a safety checklist to ensure all the right home features are present. Rebuilding Together helps families in 39 states, so visit their list of locations to find an affiliate near you.

Homes for Our Troops

Homes for Our Troops offers mortgage-free homes for veterans who were wounded in oversees combat after September 11th, 2001. To qualify, you must:

  1. Be retired or be in the process of retiring
  2. Pass a criminal and credit background check
  3. Receive a letter of eligibility from the VA Specially Adapted Housing Program

To apply, complete an online inquiry form at https://www.hfotusa.org/inquiry.

Knowing and Understanding Your Rights

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When it comes to securing a home loan, there are laws and regulations put into place to protect people with disabilities. It’s important to know the rights that protect both renters and buyers from discrimination.

Remember that if you suspect you are experiencing discrimination based on a disability, you can file a complaint.

Here’s who to contact:

Office of Compliance and Disability Rights Division
Office of Fair Housing and Equal Opportunity
U.S. Department of Housing and Urban Development
451 7th St., S.W., Room 5242
Washington, DC 20410

Phone: (800) 669-9777 TTY: (800) 927-9275

The Fair Housing Act

The Fair Housing Act was amended in 1988 and legally prohibits the following:

  1. Refusal to sell or rent to any person on the basis of race, religion, gender, disability, familial status, or national origin
  2. Discrimination based on race, religion, gender, disability, familial status, or national origin related to privileges or conditions of the rental or sale of a dwelling
  3. Advertising the sale or rental of a dwelling indicating preference or limitation based on race, religion, gender, disability, familial status, or national origin
  4. Threatening or interfering with a person’s exercising their housing rights based on discrimination
  5. Retaliating against an organization that encourages exercising these rights

Reasonable Accommodations

The Fair Housing Act allows you the right to request reasonable accommodations that allow you to fully enjoy your housing. For example, if you are in a wheelchair, reasonable accommodations for an apartment may include a lower mailbox or an assigned parking spot.

A landlord or housing provider may be able to refuse these requests if they create undue financial or administrative burden. If this is the case, there are many grants available to help pay for these accommodations.

Reasonable accommodations also include service animals. This means that a landlord with a strict “no pets” policy may be required to grant an exception for someone who is visually impaired and has a guide dog.

Living with a disability can pose many challenges, but that doesn’t have to stop you from living in a great home. You don’t have to tank your credit score or drain your savings, either. Simply taking the time to know your mortgage options and legal rights will set you up to buy your dream home at an affordable cost.

Additional Resources

Sources: The Simple Dollar | The Mortgage Reports | US Department of Labor | Centers for Disease Control and Prevention | Americans with Disabilities Act

Written on February 20, 2019

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