Homeownership Programs and Support for People With Disabilities

Homeownership may seem out of reach for many Americans, but those with a disability shouldn’t count themselves out. The homebuying process should be accessible for everyone, and some laws and programs can help you attain homeownership if you have a disability. We’ve gathered resources and support for navigating the homebuying process, including obtaining a mortgage and what you need to know before purchasing a home.

The federal government protects people with disabilities, whether they rent or own and reside in public or private housing. The Fair Housing Act prohibits discrimination against people with disabilities in home transactions. Section 504 of the Rehabilitation Act prohibits discrimination against those with disabilities who are applying for financial assistance, such as through a mortgage loan. Furthermore, under the Fair Housing Act, buildings constructed after March 13, 1991 must have accessible entrances and common areas, among other accessible features.

The ADA was passed in 1990 to give people with disabilities equal opportunity to those without disabilities. The law extends to public places, including schools, workplaces, transportation services and private locations open to the public, such as restaurants and hotels. And in 2009, the Americans with Disabilities Act Amendments Act (ADAAA) adjusted the meaning of “disability.” People with disabilities have equal employment rights and rights to state and federal government services.

The Fair Housing Act prohibits discrimination in housing matters based on race, sex and disability, among other protected categories.

The Fair Housing Act provides legal protection against discrimination based on race, sex, religion, national origin, familial status and disability. The law applies whether renting, selling, or owning housing property. Under the Act, people with disabilities have the right to make accommodations to their place of residence for accessibility. The U.S. Department of Housing and Urban Development (HUD) offers information on housing discrimination under the Fair Housing Act.

Section 504 of the Rehabilitation Act of 1973 prohibits organizations that receive federal assistance from denying services to people with disabilities. People with disabilities are given equal rights to access to benefits and services, such as through a mental health center or nursing home. This means people with disabilities have equal opportunity to receive federal services.

Under ECOA, lenders must provide an explanation if they deny an applicant credit. It also extends protection based on other classes, such as race, sex and marital status, among others. The law was enacted in 1974.

If you receive assistance in the form of disability income, such as Social Security Disability Insurance (SSDI) or Supplemental Security Insurance (SSI), you can use it to qualify for a mortgage. This income counts toward your total monthly income for the purposes of securing a mortgage. If you do receive SSI, however, keep in mind there are asset limits: $2,000 for a single person and $3,000 for a married couple. This could make it difficult, if not impossible, to save up for a down payment. And while lenders cannot refuse you a loan because you receive disability income, they can turn you down if you don’t meet minimum income and credit and debt requirements.

SSDI and SSI are acceptable income sources for a mortgage. If your application is denied, you can request an explanation from the lender. You can also try to apply again with a different lender.

Obtaining a mortgage should not be a problem if you receive disability income, as laws prevent lenders from discriminating against people with disabilities, and disability income is an accepted source of income. However, keep in mind that you can be denied a mortgage if your total income doesn’t meet the lender’s requirements. It can be a good idea to hire a mortgage advisor to help go over the different mortgage programs and types of loans, such as FHA and conventional, to see which is best for you.

Knowing your rights and the laws to prohibit discrimination can help you feel more confident in the mortgage process. These laws are important to know so that you can be aware of any red flags the lender raises, if they come up, and any questions they may ask that would be unlawful.

Housing counselors and mortgage advisors can certainly help you navigate the mortgage and homebuying process. If you do decide to hire a housing counselor, it can be a good idea to make sure your counselor is approved by the U.S. Department of Housing and Urban Development (HUD). HUD offers online resources for locating a housing advisor. A housing counselor can take a look at your financial picture and offer advice for finding the best mortgage for you. Be sure to have a list of questions to review with your housing advisor to maximize their services.

Federal and state governments offer help and resources for people with disabilities to find a home, as well as make accessibility improvements to an existing home. Contacting your local government via a municipal website email address or phone number can be a good start to finding hyperlocal resources. And be sure to check your state’s government page for disability resources. For example, the state of New Jersey offers housing resources for people with disabilities.

While people with disabilities applying for conventional and FHA loans may need to meet income thresholds, programs are available that help people with disabilities obtain a home loan without these stringent requirements. There are also special VA home loans for veterans who are disabled.

There are home loan programs for people with disabilities and general home loan programs for people with limited income. These programs can help make it easier to get a mortgage, and one that works with your financial situation. Requirements for these programs differ from conventional and FHA loans, and varying maximum loan amounts are provided as well.

Conventional Loans

There are conventional loans that people with disabilities or on low-income can use. They offer lower down payment requirements and lessened restrictions to allow greater flexibility.

• Freddie Mac Home Possible is a conventional loan that allows for a down payment of as little as 3%. Co-borrowers who don’t reside in the home are also able to be on the loan, and borrowers can own other property without being disqualified for the loan.
• Fannie Mae HomeReady allows for a lower down payment and increased credit flexibility for borrowers. Borrowers are required to take a course on homeownership education to qualify.

Housing Choice Voucher (HCV)

HCV offers help with homeownership costs and mortgage payments. There are no specific income or employment requirements, making it a good choice for people with disabilities who may be on limited income. Contact your local Public Housing Authority regarding eligibility to see if you meet the income and family size requirements to apply.

Both the federal and state governments offer assistance in various forms. Resources are available to make the homebuying process more manageable, including tax-free savings accounts for people with disabilities, assistance regarding saving for a down payment and housing advice from the U.S. Department of Housing and Urban Development.

US Department of Housing and Urban Development

The U.S. Department of Agriculture (USDA) offers loans for individuals who are elderly, disabled, low-income or Americans living in rural locations. USDA loans do not require a down payment like other loan types. A few different types of USDA home loans allow for modification to a home or a mortgage for a new home. Keep in mind there is a list of requirements to be eligible for a USDA loan.

There are three types of USDA housing loans: Single-Family Housing Direct Home Loans, Section 502 Guaranteed Rural Housing Loan and Section 504 Home Repair Program. The first two loans help low-income borrowers get mortgages for terms ranging from 30 to 38 years fixed. The home repair loan allows financing for home repairs and improvements.

As a self-employed homeowner with a disability, Aunia Kahn used a bank statement loan to mortgage her home. “It gave me a unique opportunity to be able to own a house,” Kahn says.

A bank statement loan can be a solid option if you are self-employed. Approved applicants are able to borrow up to $1,000,000 or more, depending on the bank — much more than with other loan types — without providing the typical employment documentation for conventional mortgages.

There are risks associated with a bank statement loan. “One thing I would like to say about bank statement loans is there are a lot of people out there trying to scam business owners and people that can't get conventional loans,” Kahn cautions. “The loan company I went with is one of the biggest and long-standing bank statement loan companies. They were able to get me a very reasonable mortgage. It is amazing to be able to own my home.”

FHA loans can be a great option if your credit score doesn’t meet the requirements for a conventional loan. FHA loans can be attractive because they allow for a lower down payment than other loan types. If you are unable to save for a larger down payment or have derogatory marks on your credit report, an FHA loan could be a good fit.

Other than financing the purchase of a new home, renovation and home modification loans are available to fund improvements. An Access Loan from Digital Federal Credit Union (DCU) allows for $1,000 to $25,000 for people with disabilities to make improvements for greater mobility within a home. FHA renovation loans are also available, including Fannie Mae HomeStyle Renovation and a 203(k) loan.

Down payment assistance loans and grants are available, typically to first-time home buyers. Searching for and applying for grants and assistance can be helpful ways to help fund your down payment.

• HUD Good Neighbor Next Door Grant: This grant is available to law enforcement officers, K-12 teachers, firefighters and EMTs. It provides 50% off the sale of a home, with the agreement that the recipient will live in the home as their primary residence for at least 36 months. You can check listings in your area on HUD’s website.
• Chenoa Fund: The Chenoa Fund, by CBC Mortgage Agency, offers down payment assistance for people with low-to-moderate income. It offers 3.5% to 5% for a down payment that does not need to be repaid.
• Bank of America Down Payment Grant Program: Bank of America offers assistance in the form of credit up to $7,500 to go toward closing costs and a down payment grant of 3%, or up to $10,000. Since it is a grant and not a loan, it does not have to be repaid.

Veterans Benefits Administration also offers assistance and loans exclusively to veterans. The Specially Adapted Housing (SAH) grant and Special Housing Adaptation (SHA) Grant provide funds to veterans with disabilities stemming from their service.

The SAH grant can be used to construct a new home or modify an existing home. The purpose of the grant is to allow veterans to have a home that allows them mobility and ease of use.

The SHA grant is typically used to modify an existing home to make it more accessible. The grant amount maximum is relatively lower than for a SAH grant.

Aside from government assistance, some nonprofits help people with disabilities own a home. Some nonprofit programs have initiatives to include people with disabilities, and others' sole mission is to provide housing for people with disabilities and severe injuries.

Habitat for Humanity acknowledges that purchasing a home can be difficult for people with disabilities, and partners with other agencies to help further its initiative to help provide housing. Its different global divisions construct and renovate homes for people with disabilities and earn a low-income.

Homes for Our Troops helps build and adapt custom homes for recent veterans with severe injuries. Veterans can choose where they want to live, and the organization stays in touch after the home is constructed and donated to help meet any needs that arise.

Rebuilding Together AmeriCorps is an organization that helps repair and rebuild homes. It focuses on providing a safe home for the recipients of its programs. It performs repairs as well as energy efficiency upgrades.

Whether you are beginning the homebuying process or have faced discrimination and need assistance, there are resources available to help you. Review the different links to find resources and application forms that you may need.

• Fair Housing Accessibility Guidelines: Learn about the guidelines for accessible housing and important contact information.
• Information for People With Disabilities: HUD offers information on the different laws in place to protect people with disabilities from discrimination and helpful links.
• National Affordable Housing Act: Review the Affordable Housing Act for information on support for housing.
• Apply for Social Security Benefits: This link allows you to apply for both SSI and SSDI.
• Find Your Local Public Housing Authority: For assistance with applying for a Housing Choice Voucher, find and contact your local public housing authority.