- Can You Buy a Home on Disability Income?
- Federal Grants and Programs
- Specialized Home Loans for the Disabled Home Buyers
- State and Local Grant Programs
- Non-Profit Organizations
- Additional Financing Options
- Consider HUD Housing Counselors
- Owning an Accessible Home is Within Reach
Best Grants and Home Loans for Disabled Homebuyers
Owning a home can provide financial stability, independence, and the ability to build equity over time. However, the path to homeownership when you are disabled can be complicated, with additional hurdles that can be discouraging.
Fortunately, specialized assistance and financing options are available to help make the dream of homeownership a reality.
So, what are the best home loans for disabled individuals? And what grants are available for disabled homebuyers? This guide will walk you through the government and private resources that make homeownership accessible to buyers with disabilities.
Can You Buy a Home on Disability Income?
Yes, you can buy a home relying on disability income, provided it is stable, ongoing, and expected to continue. Most lenders, including those offering government-backed loans like the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA), will accept disability income to qualify for a mortgage.
The Fair Housing Act prohibits lenders from discriminating based on disability when considering a mortgage application. That means a lender cannot deny you a loan or impose unfair terms simply because you have a disability. However, lenders will thoroughly examine your income sources, just as they would any applicant, to ensure they are reliable.
Many specialized mortgage programs are designed specifically for disabled borrowers. These lenders will consider long-term disability payments, Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), and other verified disability income sources when determining if you qualify.
While meeting debt-to-income ratio requirements can take careful budgeting, disability income can absolutely be used to qualify if properly documented. Don’t assume homeownership is out of reach simply because you rely on benefits – you likely have more options than you think.
The Fair Housing Act
The Fair Housing Act is a critical piece of legislation designed to protect individuals from discrimination in housing and housing-related transactions; this includes those with disabilities. The Act prohibits discrimination based on disability, whether renting or buying. This includes lending—lenders cannot use a disability as a reason to deny financing or impose different terms or conditions on a loan, such as higher interest rates, more stringent qualification criteria, or higher down payment requirements.
The Fair Housing Act is the legal foundation for why Lenders must consider all reliable income sources (SSDI, SSI, & other disability income) when evaluating a loan application.
Federal Grants and Programs
The pathway to an affordable, accessible dream home may seem challenging when you have a disability, but you’d be surprised at the federal grants to help disabled buy a home and other programs available. Financial assistance exists—you just need to find it.
The US government has a variety of disability benefits and funding sources specifically to help people with disabilities secure suitable housing. Key federal programs include:
- Section 811, Supportive Housing for Persons with Disabilities, funds nonprofit developers who construct affordable, accessible housing with supportive services for very low-income adults with significant disabilities.
- HOME Investment Partnerships Program which provides grants to states and localities to fund a wide range of affordable housing activities—including building, buying, and rehabilitating affordable housing for rent or homeownership.
- Community Development Block Grant (CDBG) provides communities with resources to address housing and development needs with funds that can be used to improve accessibility for people with disabilities through rehabilitation and modifications.
The U.S. Department of Housing and Urban Development (HUD) Programs
For affordable, accessible housing, HUD provides specialized programs to help people with disabilities. What are the key options?
Section 811 Supportive Housing for Persons with Disabilities
The Section 811 program funds nonprofit developers to construct affordable rental housing with supportive services for low-income adults with significant disabilities.
HUD offers long-term, low-interest loans to cover development costs. Rental assistance funding is also provided to make housing affordable for eligible residents—units must be leased to adults with disabilities earning less than 50% of the area median income.
Section 202 Supportive Housing for the Elderly Program
Similar to Section 811, the Section 202 program offers capital funding to nonprofits that finance the construction of affordable rental housing for low-income seniors.
HUD provides long-term, low-interest loans and rental subsidies, so residents pay only 30% of their adjusted income toward rent and utilities. At least one household member must be at least 62 years old. The applicant must earn less than 50% of the area median income to qualify.
Rental Voucher Programs
The Housing Choice Voucher (HCV) helps very low-income families, seniors, and people with disabilities access affordable private housing. Participants are able to apply to housing that meets HUD requirements and are not limited to supported housing projects.
HUD also offers targeted Non-Elderly Disabled Vouchers exclusively for disabled renters through select agencies. These vouchers subsidize a portion of monthly rent to make it affordable based on income. Applicants can use vouchers at any suitable unit where the landlord agrees to participate.[KH1]
Homeownership Voucher Program
The HVC homeownership program allows assisted families to use their vouchers to purchase a home instead of as rental assistance.
The program assists with homeownership costs such as mortgage payments, taxes, insurance, and other costs. Eligibility includes being a first-time buyer, meeting work requirements, getting a housing counseling program, and purchasing a HUD-approved home. The program enables voucher recipients to shift from renting to owning with continued assistance.
Specialized Home Loans for the Disabled Home Buyers
Several government-backed mortgage programs offer benefits tailored to homebuyers with disabilities. These specialized loans feature lower down payments, flexible credit requirements, and options to include disability income.
Fannie Mae’s HomeReady Program
Fannie Mae’s HomeReady mortgage makes buying more accessible. The HomeReady program helps creditworthy low- to moderate-income buyers, including those with disabilities, overcome down payment barriers.
With flexible options like 3% down and income limits based on area medians, this loan opens doors. This program provides an alternative to FHA loans for buyers needing low down payments but wanting a conventional loan.
Who Qualifies for the HomeReady Program?
To qualify for a HomeReady mortgage, homebuyers must have:
- A minimum credit score of 620.
- Income at or below 80% of area median income limits.
- Completed the required homebuyer education course.
While the program allows non-occupant borrowers to assist with qualification, the HomeReady is only for primary residences, not investment properties.
Income Limits for the HomeReady Program
HomeReady mortgage eligibility depends on your income falling at or below 80% of your area’s median income. You can verify income limits by property address using Fannie Mae’s Income Eligibility Lookup tool.
Freddie Mac’s Home Possible Mortgages
Alongside Fannie Mae’s HomeReady program, Freddie Mac offers Home Possible mortgages to expand homeownership access for low to moderate-income buyers. While not exclusively for buyers with disabilities, it is an excellent option for those relying on disability income.
Like HomeReady, Home Possible features flexible qualifying guidelines, including down payments as low as 3% of the purchase price. Borrowers can use gift funds and grants for their down payment and closing costs. Income from SSDI, SSI, or long-term disability payments can be used to qualify.
Another benefit is reduced mortgage insurance coverage and cancellable mortgage insurance once 20% equity is reached, which saves money long-term. Homebuyer education is also required to promote responsible ownership.
The Home Possible mortgages help disabled borrowers overcome obstacles and achieve affordable homeownership. If you’re on a strict budget but can still afford monthly payments, Home Possible could work for your situation.
Who are Home Possible Loans for?
Home Possible mortgages are for low-income borrowers, including those who are disabled. To be eligible for a Home Possible mortgage, you must:
- Have an income of less than 80% of the area median. Freddie Mac provides an income lookup tool to verify your eligibility.
- Have a credit score of 580 or higher.
- Occupy the home as your primary residence and own no other properties.
Benefits of Home Possible Loans
The main benefit of Home Possible Loans is that you only need a 3% down payment, which is lower than even FHA loans. This majorly reduces the cash needed upfront.
Furthermore, unlike conventional loans, your down payment can be gifted, whether from family, an employer program, or other sources. Credit requirements are also more flexible than standard mortgages. The minimum FICO score is 580, so buyers with limited credit history can potentially qualify.
Additionally, mortgage insurance coverage is discounted, and you have the option to cancel MI once you reach 20% equity in the home’s value. This saves money, especially long-term.
State and Local Grant Programs
In addition to federal assistance, most states offer their own grants and programs to support affordable homeownership for buyers with disabilities. These state-specific resources can make purchasing or modifying a home more feasible.
Options vary widely across the country; research what’s available according to your location. Most programs fall under the category of ‘down payment assistance programs,’ meaning that they are used in combination with another loan to help with the borrower’s down payment. Other programs are grants to help disabled homeowners modify their properties for better accessibility.
A few examples of state and local programs include:
- New York – HomeFirst Down Payment Assistance Program
Provides qualified NYC homebuyers up to $100,000 toward down payment and closing costs on a home purchase. The subsidy is a 0% deferred loan.
- California – CalHome Program
Assists low-income first-time homebuyers in California cities like Oakland with down payment assistance loans to fill financing gaps. Loans are deferred for 30 years.
- Illinois – Illinois Home Accessibility Program
Offers grants of up to $25,000 to Illinois homeowners and renters with disabilities to make home modifications for improved accessibility and safety.
- Florida – Florida Assist (FL Assist)
A down payment assistance program is provided to FHA, VA, conventional, USDA loans, and borrowers with a second mortgage of up to $10,000. Repayment is deferred until the sale, transfer, refinance, or the first mortgage is paid off.
Consult state and local housing agencies to learn about programs available in your area to support affordable home buying and ownership for buyers with disabilities.
Assistance for disabled home buyers is not limited to government-funded organizations. There are also various non-profit organizations that make a considerable impact, helping people with disabilities own property and get access to the services they need to live as independently as they can.
Habitat for Humanity’s Homeownership Program
Habitat for Humanity is an international organization that serves low-income earners to improve their living conditions.
In the United States, Habitat is primarily known for building homes or remodeling dated properties to bring them up to liveable standards. Criteria for renovations and construction are based on the level of need, but they often build with accessibility in mind.
Under Habitat for Humanity’s Homeownership Program, homes are then sold to qualifying low-income families (including those with disabilities) so they can experience stability and build equity through homeownership. Many of their homes are built to be accessible to those with physical disabilities.
Habitat families spend no more than 30% of their household income on housing and are not required to have a down payment. Additionally, they pay 0% interest on their mortgage. Instead, homeowners are required to invest “sweat equity” in the form of volunteer hours, either on their own homes, on other properties the organization is working on, or through other Habitat for Humanity volunteer opportunities.
Requirements for the Habitat for Humanist’s Homeownership Program vary by location but generally include:
- Falling under income limits, typically 30-60% of area median income.
- Lacking decent current housing conditions.
- Demonstrating need, willingness to partner, and ability to pay the mortgage.
- Committing to sweat equity participation.
If you qualify, you’ll complete an extensive application with your local branch detailing your current housing, income, debts, and more. Applications are ranked based on need. If selected, you’ll attend informational meetings and begin accumulating sweat equity.
Benefits of Habitat Homeownership
The top benefits of the Habitat for Humanity Homeownership Program include:
- The pride and stability of homeownership.
- Building equity over time.
- Mortgage payments scaled to income.
- Housing that meets your family’s needs.
- Support before and after purchase.
Habitat fosters community improvement by concentrating investment in certain neighborhoods. If your need matches their mission, Habitat may offer an affordable path to accessible homeownership.
National Council on Independent Living
The National Council on Independent Living (NCIL) provides valuable resources to support affordable and accessible housing options for people with disabilities.
As an advocacy organization for independent living, NCIL offers information and guidance to help remove barriers to homeownership. Key offerings include:
- Information on home modifications and accessible housing design.
- Toolkits to help disabled individuals through the home-buying process.
- Referrals to local Centers for Independent Living (CILs), which can provide housing counseling.
- Advocacy for increased funding of independent living services.
- Training and webinars on topics like fair housing rights for buyers with disabilities.
Accessing homeownership when you are disabled doesn’t stop at loans – for many their homes need modifications to enable independent living. Rebuilding Together focuses on advancing disability rights and independent living through community initiatives. Their Safe At Home Program assists elderly and disabled homeowners by installing home modifications such as grab bars, railings, ramps, and making other critical repairs and accessibility modifications.
Qualifying low-income homeowners can apply to receive home modifications completely free of charge. Through home modifications, Rebuilding Together aims to help vulnerable populations maintain independence and continue living comfortably in their own homes.
The Corporation for Supportive Housing (CSH)
The Corporation for Supportive Housing (CSH) is a national non-profit organization dedicated to advancing affordable housing solutions that improve health, increase housing stability, and reduce public system use.
While not solely focused on disability, many of CSH’s supportive housing models and policy efforts help expand affordable, accessible housing options for people with disabilities. CSH’s services include:
- Loan funds to develop accessible housing.
- Advocacy for policy reforms.
- Consulting on accessible housing design.
- Research on effective supportive housing innovations.
Additional Financing Options
Combining different programs and financial products can help disabled buyers cover more costs associated with purchasing and modifying a home.
Down Payment Assistance Programs
Down Payment Assistance (DPA) programs provide grants or low-interest secondary loans to cover all or part of your down payment. These loans help buyers who can manage monthly mortgage payments but lack funds for the initial down payment.
DPA programs are offered by government agencies, non-profits, banks, and other lenders. When layered with a primary mortgage, DPA can make homebuying more feasible for lower-income disabled buyers.
VA Home Loans for Disabled Veterans
The VA home loan program offers 100% financing and other benefits for eligible disabled veterans.
Key benefits include:
- Waived VA funding fees.
- Option for home adaptation grants up to $109K.
- Qualifying with disability income.
- Lower mortgage rates.
- Flexible credit criteria.
Removing down payment barriers and offering home modification funds helps disabled veterans access homeownership.
VA Home Loan Requirements
While flexible, VA loans do have eligibility requirements. Eligible veterans must:
- Have sufficient income to cover mortgage payments.
- Occupy the home as your primary residence.
- Have a satisfactory credit history.
- Meet service length requirements.
Grants for Disabled Veterans
Taking advantage of every available program, along with mortgage and down payment assistance, can make buying a home adapted to your disability needs more feasible.
Grants for veterans with service-connected disabilities are available through the VA. Veterans must meet disability requirements, so it’s important to check which grant you might qualify for:
- The Special Adapted Housing Grant is for qualifying veteran homeowners, allowing them to access up to $109,000 for home modifications.
- The Special Home Adaptation is another program that can be made available to qualifying veterans or their family members for home modifications. This grant can provide up to $23,000.
Consider HUD Housing Counselors
Accessing services and grants that help disabled buyers purchase a home can be complicated. HUD-approved housing counseling agencies provide valuable guidance to navigate the processes with each agency.
HUD-certified counselors help potential homebuyers understand their options and identify resources. Their services include:
- Explaining programs and requirements for grants.
- Assessing mortgage readiness and reviewing loan options.
- Providing guidance on buying and financing accessible homes.
- Assisting with the application process.
- Helping buyers access DPA programs.
- Offering guidance on credit improvement.
Owning an Accessible Home is Within Reach
Purchasing an affordable, accessible home adapted to your needs as a buyer with disabilities is achievable with the right approach. Specialized loans, grants, and assistance programs make homeownership possible.
The key is understanding your options and piecing together the best resources for your situation. You deserve to feel empowered, not overwhelmed. Take advantage of every program tailored to your needs. Work with lenders experienced in serving buyers on disability income. Consult housing counselors to identify grants and aid you qualify for. And partner with a real estate agent knowledgeable about accessibility requirements.
Having an expert in your corner who understands your specific accessibility requirements will give you the confidence to navigate the process. FastExpert can help you easily connect with top local agents equipped to help make the dream of owning your own home a reality. Just search your area, review agent profiles, and get matched with a qualified agent.
The homeownership dream is within your reach. It just takes the right guidance and financing mix.