Feel like homeownership is out of reach? You’re not alone: Bloomberg reports that nearly 25 percent of millennial renters have given up on owning a home, and the remaining two-thirds who still want to buy do not have the money for a down payment.

While it’s true that interest rates have risen and prices are up, there’s no reason to despair. There are many affordable housing programs available that provide a streamlined pathway to homeownership.

Low-Income Housing Tax Credits (LIHTC)

The LIHTC program is the largest federal initiative for creating affordable housing. The program works by offering a dollar-for-dollar reduction in federal tax liability to incentivize private companies to invest in affordable housing—and keep it affordable for at least 30 years.

While this program directly benefits renters, it can also help aspiring homeowners:

• Save for a down payment
• Achieve more financial stability while enjoying predictable rent
• Free up money to pay off debt and improve credit scores
• Set financial goals
• Develop a strategic savings plan for a down payment

HUD Homeownership Voucher Program

The U.S. Department of Housing and Urban Development initiative helps low-income families—and those who receive Section 8 vouchers—transition from renting to homeownership. This program can convert your housing choice voucher into a homeownership voucher. So, instead of using that voucher to subsidize rent, you can use it to offset mortgage expenses.

To qualify, you must currently receive Section 8 vouchers, have consistent income, qualify for a mortgage, and select a home that meets basic HUD requirements.

Good Neighbor Next Door Program

The Good Neighbor Next Door program is another HUD-backed initiative that offers significant discounts to law enforcement officers, teachers, firefighters, and emergency medical techs.

Participants can purchase a home in designated revitalization areas at a 50% discount.

Federal Housing Administration (FHA) Loans

FHA loans are backed by the federal government and designed to make homeownership more accessible, particularly for those who may have low credit scores and can’t afford a 10 to 20% down payment.

Unlike conventional mortgages, FHA loans require you to put down as little as 3.5% of the home’s purchase price. FHA loans are also more lenient with credit scores and debt-to-income ratios and do not require you to carry private mortgage insurance.

VA Loans

VA loans are backed by the Department of Veterans Affairs (VA) and are designed to assist active-duty service members, veterans, eligible spouses, and certain National Guard and Reserves members to become homeowners.

One of the most significant benefits of VA loans is that they generally do not require a down payment, come with competitive interest rates, do not require homeowners to carry private mortgage insurance, and have lenient credit requirements.

JustChoice Lending: Your Mortgage Solution

JustChoice Lending (JCL) is a socially responsible mortgage lender providing competitive rates and personalized service. We assist clients of all income levels, including those from lower-income backgrounds, in achieving their homeownership goals by improving their credit scores. Contact us today to speak with one of our mortgage experts!