Can You Get a Home Loan on Disability

By Kimberly Hodgkins

Homeownership options are available to borrowers who might have a disability, through mortgage lenders and mortgage brokers that offer specific loan programs to aid these consumers.

Many mortgage companies offer disability loan programs such as MyCommunityMortgage with the Community HomeChoice option. This type of loan program is designed for low- to moderate-income borrowers with disabilities. Additionally, this type of loan is offered to those with a family member who has a disability.
The Community HomeChoice loan offers up to 97 percent financing, meaning the borrower must have minimum of 3 percent downpayment, with $500 being their own funds. The downpayment can come from multiple sources such as grants or gifts.
Alternatively, if you possess a disability and are eligible, a VA loan is also an option. Most mortgage companies offer VA loans. VA loans offer no downpayment options and no insurance premiums. This type of loan is ideal for the first-time homebuyer.

To be eligible for a Community HomeChoice loan, you must meet certain guidelines and be defined as handicapped by the Fair Housing Amendment Act. Income is also reviewed, as it is a vital part of qualifying for a home loan. Income sources can include wages, public disability benefits, private disability benefits, Section 8 homeownership vouchers, temporary assistance to needy families, state supplemental income payments and other types of income. The income must meet low- to moderate-income standards and have the likelihood of remaining stable and consistent. Your credit will also be reviewed to determine eligibility.
If you are seeking a VA loan, request a certificate of eligibility from the VA. You will need to provide this to the lender or mortgage broker of your choice.

Search for a loan provider by contacting a mortgage lender or mortgage broker in your area, or the area where you are looking to purchase your home. Ask the type of loan products they offer. Ask them for a prequalification. Provide your income, debt and asset information. This will allow the lender or mortgage broker to calculate the loan amount for which you qualify, based on your income and expenses.
The next step after prequalification if getting preapproved. Again, contact a lender or mortgage broker and provide the same information adding your legal name, address, phone number, date of birth and Social Security number. At this time the lender or mortgage broker will obtain a credit report. This will allow them to obtain your credit history and determine your eligibility. The lender or mortgage broker will review your credit history and attempt to match you with a loan program that fits your requirements.
Now that your lender or broker has matched you with a loan program and you have obtained a preapproval, you're ready to start shopping for a home.

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