Homeownership has always been central to the idea of the American dream. Unfortunately, due to skyrocketing housing prices and high mortgage rates, it's harder than ever for many people to achieve that dream.

If you're living in a below-average income household, you may feel like you're completely priced out of the housing market. But thanks to some state and federal low-income mortgage options, the dream of homeownership doesn't need to be out of reach.

Government-Backed Home Loans

The federal government has historically been one of the largest provider of loans, grants, and other forms of assistance in the country. After all, it's in the government's best interest to keep as many of its citizens housed as possible to maintain a happy and healthy workforce. This is why agencies like the U.S꧅. Department of Housing and Urban Develo🌸pment (HUD) and the 澳洲幸运5�♔�官方开奖结果体彩网:Federal Housing Administration (FHA) have programs aimed at helping lower-income households ♊afford homes.

Borrowers who meet certain criteria can seek and obtain government-backed mortgages with varying requirements, down payment minimums, and perks through several programs, including FHA loans and VA loans. Because the U.S. government backs these programs, lenders often see these programs as aꩲ low-risk investment, leading to better terms and potentially more affordable rates.

FHA Loans

With generally less strict requirements than other government-backed programs, the 澳洲幸运5官方开奖结果体彩网:FHA loan program is desi♏gned to help first-time low-income buyers enter the housing market.

To qualify for the program, borrowers should have a median 澳洲幸运5官方开奖结果体彩网:credit score of 580 and be able to afford at least a 3.5% down payment on the home. You can determine your FHA loan limit—which will depend on the county where you plan on mꦬaking your purchase—by consulting the .

Good Neighbor Next Door Program

Eligible public service employees can purchase a home at 50% off through the Good Neighbor Next Door program, which HUD provides. All that's required is that you are currently working as a full-time:

• Pre-K through 12th-grade educator
• Emergency medical technician
• Firefighter
• Law enforcement officer

You should also plan to buy a home in a HUD-designated revitalization area and be willing to commit to living in that home for at least three yearᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚs.

There are a few caveats, however. You can only buy properties through the Good Neighbor Next Door program, and properties are only listed for seven days. If multiple people bid for the same property, the winning offer will be selected by random lottery. A silent second mortgage will also be required for the discount amount, though you won't be making payments and no interest will accrue as long as you stay in that home for the requisite three years.

USDA Section 502 Guaranteed Loan Program

Also known as the Rural Development loan, this option helps prospective low-income homeowners buy a home without making any 澳洲幸运5官方开奖结果体彩网:down payment at all. The major requirement for this loan, however, is that it's only available for certain properties that are located in rural parts of the country.

According to the USDA, eligible applicants can use the loan to purchase, build, rehabilitate, improve, or relocate a dwelling in an eligible rural area with 100% financing. Furthermore, the program guarantees 90% of the loan, so lenders are extremely comfortable knowing there's less risk to approve such a loan without a down payment.

Applicants looking to get into this program cannot exceed 115% of the median household income in the chosen region. They must also agree to personally live in the home as their primary residence and be a U.S. citizen, U.S. non-citizen national, or qualified alien.

VA Loans

Veterans, active members, and surviving spouses with a low annual income may be eligible for a VA loan. Provided by the U.S. Department of Veterans Affairs (previously the 澳洲幸运5官方开奖结果体彩网:Veterans Administration), these loans are designed to connect current or former military personnel with access to loans from priv𝕴at🐲e lenders at competitive rates.

If you're obtaining mortgage assistance from the VA, know there's no requirement for a down payment, and the seller can help cover your closing costs. Furthermore, it doesn't require any monthly mortgage insurance.

Eligibility is based on the kind of service and how long you or your loved one served. If you're currently on active duty or your service was during wartime, you need at least 90 days of experience. If your service was during peacetime, you need 181 or more days. If you were separated from the service, you must have been in the service for 24 months or the full ordered period of the service. And if you were in the National Guard or Reserve, you must have served at least six years.

States May Offer Assistance

Along with assistance from the federal government, all 50 states and 🐠U.S. territories have the capability to provide rental, homeownership, and house-buying assistance. S𝄹ponsored by your state or local governments, these programs vary from state to state.

To fi♌nd out more about your state's housing assistance programs, including any mortgage loan programs, be sure to check out . Depending on the state and its resources, assistance may come in the form🍷 of down payment assistance, grants, or forgivable loans. Eligibility and requirements may vary depending on the state where you're looking to become a homeowner.

What Constitutes Low Income?

Knowing where your income stands can help you find the right home loan for you. Not only will you know how much👍 you can a😼fford per month in payments, but you may also be able to take advantage of special loans or programs if you need additional help.

The threshold for low-income housing and other programs for low-income households can vary widely from state to state. For example, a family of four in Jersey City, New Jersey, is considered low income if they bring in $107,000 per year, while that same family in Jackson, Mississippi, is considered low income if they earn $66,800 per year, according to the latest data from HUD.

All of this is to say that the concept of low income is relative. As you seek out a low-income loan option, ensure you qualify before applying by starting with . Most loan options will specify the maximum amount of money an appꦫlying household can make if they want to be considered for a loꦇan.

The Bottom Line

Homeownership isn't automatically out of reach for lower-income households. State and federal programs can help subsidize the costs of buying a home.

Remember that the definition of low income varies from state to state. Areas with higher cost-of-living will have higher income thresholds than those with lower COL. Check your income against local guidelines to ensure eligibility.