Home Finance Guide for Prospective Homeowners with Disabilities

There are various programs that can help prospective homeowners with disabilities find their forever homes. FHA loans, USDA loans, VA loans, and the Conventional 97 Program are loans designed to help those with disabilities buy a home, with special programs for veterans. Learn more in our free home finance guide for prospective homeowners with disabilities below.

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Melanie Musson is the fourth generation in her family to work in the insurance industry. She grew up with insurance talk as part of her everyday conversation and has studied to gain an in-depth knowledge of state-specific car insurance laws and dynamics as well as a broad understanding of how insurance fits into every person’s life, from budgets to coverage levels. She also specializes in automa...

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UPDATED: Jul 21, 2021

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Home ownership is one of the major milestones of life as an adult in the United States. A disability does not need to get in the way of that vital step. In fact, the federal government has established laws to ensure that the dream of homeownership can be attained for anyone, including those with disabilities.

In addition to the protection of the law, there are also various programs that may help you to attain the new home you are looking for. This guide will cover the laws that protect individuals with disabilities during the home purchase process. We will also cover various loans, grants, and other helpful resources.


Your Rights

Having a disability is not uncommon. In fact, it is estimated that 9.9% of people in Utah have a disability and 19.8% of people in West Virginia do as well, with the majority of the rest of the states falling between those two numbers.

According to section 503 of the Rehabilitation Act of 1973 and Section 188 of the Workforce Innovation and Opportunity Act, a disability is defined as a physical or mental impairment that substantially limits one or more major life activities.

If you have a disability, the Americans with Disabilities Act ensures that you cannot be discriminated against because of that disability. This means that banks, realtors, and others involved in the home purchasing process cannot deny you based on disability or disability income.

In addition to that, the Fair Housing Act protects the right to equal opportunity when it comes to housing in the United States. The United States Department of Housing and Urban Development oversees much of this, especially when it comes to public housing and government funding for housing.

According to HUD, “It is unlawful for a housing provider to refuse to rent or sell to a person simply because of a disability. A housing provider may not impose different application or qualification criteria, rental fees or sales prices, and rental or sales terms or conditions than those required of or provided to persons who are not disabled.” They also require that housing providers make reasonable accommodations for persons with disabilities.


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Types of Loans

Because mortgage discrimination is against the law, every type of mortgage is open to people with disabilities who qualify. However, there are still some loans that may be more advantageous or easier to attain for home buyers with disabilities.

In addition, remember that social security, public assistance, and other disability payments are considered as income by lenders. According to the Equal Credit Opportunity Act, they cannot deny you based on the source of the income. They must include your disability or public assistance when calculating your total income.

Here are the loans we recommend:

  • FHA loans – These loans are backed by the Federal Housing Administration, which is the largest insurer of residential mortgages on the planet. Borrowers can qualify for this type of loan with a down payment that is as little as 3.5% for a credit score of 580 or more.
  • USDA loans, referred to as rural housing loans, are for low to moderate income buyers in non-urban areas.
  • VA loans are a no money down option available to United State veterans.
  • The Ready Buyer Home Path Mortgage by Fannie Mae considers the income of everyone in the household, even if they are not included in the mortgage. This may help people to qualify who might not otherwise have enough personal income to do so.
  • The Conventional 97 program offers a three percent down payment. It is offered by both Fannie Mae and Freddie Mac.


Special Programs for People with Disabilities

For veterans –

  • If you are a veteran, look into the Specially Adapted Housing Grant, the Temporary Residence Adaptation Grant, or the Special Housing Adaptation Grant to made modifications to your home.
  • Homes for Our Troops builds and donates specially adapted housing to severely injured veterans.

For low-income individuals –

  • If you are on a fixed low income, consider Habitat for Humanity. They offer newly constructed affordable housing options for those in need.
  • The Fannie Mae Community HomeChoice with PHFA Access Modification program can help buyers to make access modifications to their homes.
  • Fannie Mae offers the Community HomeChoice Program, which helps low and moderate-income individuals with disabilities as well as their caregivers.
  • Check with your state Housing Development Authority. Many have programs intended to assist home buyers.
  • The Federal Home Loan Bank (FHLB) Disability Initiatives offers an Affordable Housing Program (AHP) which can help with closing costs and some of the expenses of purchasing a home. It is the largest private source of affordable housing grant funds in the United States.

For everyone –

  • HomeSteps by Fannie Mae assists you in buying a clean and well-maintained home without competitions from investors.


Additional Resources

Are you still looking for ways to get on the path to home ownership? These sites are worth investigating:

MyMoney.gov offers advice on borrowing and saving for a new home.

The University of Southern California has collected some great resources on home modifications.

Benefits.gov offers information on general disability assistance.

USA.gov is a great source of information for finding assistance to purchase a home. They also have a list of state agencies if you are looking for loans and grants in a specific area.

The National Low-Income Housing Coalition has put together a list of over 300 state and local resources for finding low income housing.

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