Financial Assistance for Individuals with Disabilities: Housing Grants and Loans

Home Buying for Individuals with Disabilities

Key Takeaways

• You can qualify for a mortgage using disability income.
• Disability benefits count as income if you can show they’ll continue for at least three years.
• There are special home loans and grants to help buyers with disabilities.
• Parents can buy homes for children with disabilities with favorable loan terms.

If you’re an individual with a disability, you can buy a home. As long as your disability income is stable and expected to continue, lenders can use it to qualify you for a mortgage. You don’t have to disclose your disability—just your income.

Programs like FHA and VA loans, along with grants for buyers with disabilities, can make homeownership more affordable and accessible.

Can I Buy a House on SSDI or SSI?

Yes. Both SSDI (Social Security Disability Insurance) and SSI (Supplemental Security Income) are accepted by most lenders as reliable income for home loans. These benefits qualify you for major loan programs like FHA, VA, USDA, and conventional mortgages. There are also disability-specific home loans and grants designed to help you buy a home.

Keep in mind, lenders have different rules; if one says no, try another. Your chances of approval increase when you shop around.

Disability Income Requirements for Home Loans

To use disability income (SSDI, SSI, or long-term disability) on a mortgage application, you’ll need to meet a few basic requirements:

• Provide an SSA Award Letter showing your disability benefits amount and start date.
• Show proof you are currently receiving disability payments (e.g., recent bank statements).
• Confirm that your disability income is expected to continue for at least three years (usually stated in the SSA letter).
• If you have long-term disability insurance, provide a statement showing your monthly benefit and how long it will last.
• If you’re not the disability recipient (like a parent buying for a child with a disability), submit the recipient’s SSA letter and proof of income, and prove the home will be occupied by the recipient.

Home Loans vs. Grants for Home Buyers with a Disability

When it comes to home buying assistance for borrowers with disabilities, it’s important to understand the distinction between grants and home loans.

Housing Grants

• Don’t require repayment, typically provided by government entities or non-profits.
• Help with down payment, closing costs, or repairs.

Home Loans

• Borrowed funds that need to be repaid over time.
• Can offer more substantial amounts to finance the entire home purchase.

Home Loans for Buyers with Disabilities

Special mortgage and grant programs exist to support people with disabilities—and those buying homes for family members with disabilities—in achieving affordable, accessible homeownership.

Here are some of the most popular programs for buyers with disabilities:

1. Fannie Mae HomeReady

Ideal Candidate

• Limited cash for down payment
• Lower income
• Looking to purchase or refinance
• First-time or repeat home buyers

Fannie Mae HomeReady loan helps low- to moderate-income borrowers, including individuals with disabilities, access affordable financing with flexible income and credit guidelines.

Requirements:

• Credit score of 620 or higher
• Minimum 3% down payment
• Income no more than 80% of area median income (AMI)

Key Benefits:

• Entire down payment can be gifted or covered by assistance programs.
• Flexible income guidelines, including Social Security and long-term disability income.

2. FHA Home Loans

Ideal Candidate

• Limited cash for down payment
• Lower income
• Low credit score
• First-time or repeat home buyers

FHA loans are a popular option for adults with disabilities who may not qualify for traditional mortgages due to low income or credit challenges.

Requirements:

• Minimum credit score of 580 to qualify for a 3.5% down payment
• Stable, documented income, including SSI or SSDI

Key Benefits:

• Low down payment requirement (as little as 3.5%).
• Disability income accepted as qualifying income.

3. VA Home Loans

Ideal Candidate

• Qualifying veteran
• No cash for down payment
• Using VA disability income

VA loans offer powerful homebuying benefits to eligible veterans, including those with service-connected disabilities—often with no down payment or funding fee required.

Requirements:

• Must be a qualifying veteran, active-duty service member, or eligible surviving spouse
• Disability income (e.g., VA benefits) can be used for qualification

Additional Benefits:

• No down payment required.
• No VA funding fee for veterans with service-connected disabilities.

4. USDA Home Loans

Ideal Candidate

• Buying in a rural area
• Limited cash for down payment
• Low to moderate income

USDA loans offer affordable, zero-down financing for eligible home buyers with disability income, especially those in rural areas.

Requirements:

• Moderate income (no more than 15% above area median)
• Apply through an approved private lender

Program Benefits:

• No down payment required.
• Subsidized payments for USDA Direct borrowers.

5. HUD Housing Choice Vouchers (Section 8 Homeownership Program)

Ideal Candidate

• Current Section 8 holder
• Buying a HUD-approved home
• Low income

The Housing Choice Voucher (HCV) homeownership program, run by HUD, allows eligible voucher holders, including people with disabilities, to buy a home instead of renting.

Requirements:

• You must already have a Section 8 Housing Choice Voucher
• Meet minimum income standards, typically at least the federal SSI benefit for an individual living alone

Program Benefits:

• HUD helps pay your mortgage, taxes, and insurance.
• Covers utilities, maintenance, and major repairs.

Grants to Help Buyers with Disabilities Buy a Home

Every state has down payment assistance programs (DPAs) designed for first-time home buyers and those with low to moderate incomes.

1. Down Payment Assistance Grants

These grants help cover down payments and/or closing costs for first-time buyers or those with low to moderate incomes.

Requirements:

• Income limits vary by state and program.

Key Features:

• Offered by state Housing Finance Agencies, local governments, and nonprofits.
• May require completion of homebuyer education courses.

2. VA Grants

The Department of Veterans Affairs (VA) offers home loan programs and home modification grants to help veterans with disabilities buy a home or make their current home more accessible.

Available VA Grants:

• Specially Adapted Housing (SAH) Grant: Buy, build, or modify a permanent home.
• Special Housing Adaptation (SHA) Grant: Modify a home for disability-related needs.

3. USDA Single-Family Housing Repair Grants

Helps low-income homeowners repair, improve, or modernize their homes and remove health and safety hazards.

Program Features:

• Provides financial help for home repairs and safety improvements.
• Offers both grants (up to $10,000) and low-interest loans (up to $40,000).

4. Nonprofit Help

Several national nonprofits provide tailored homeownership assistance for individuals with disabilities and low-income families.

Types of Nonprofit Assistance:

• National Disability Institute (NDI): Improves financial opportunities for people with disabilities.
• Habitat for Humanity: Builds ADA-compliant homes and offers affordable, disability-inclusive home loans.
• Homes for Our Troops: Provides specially adapted, mortgage-free homes to disabled veterans.

Grants to Buy a House for Parents of a Child with Disability

Parents and caregivers may access grants for down payments, closing costs, or home modifications.

While grants for parents are limited, programs like those from USDA and the Department of Veterans Affairs may provide valuable assistance. Local nonprofits also administer down payment assistance and housing support programs for families with disabled dependents, offering no-repayment grants to offset upfront costs.

Disability Rights for Home Buyers

Understanding your legal rights is crucial if you are navigating the housing market as a person with a disability. Key legal protections include:

• Fair Housing Act: Prohibits discrimination in housing based on disability.
• Americans with Disabilities Act (ADA): Ensures equal access for people with disabilities in public spaces.
• Equal Credit Opportunity Act (ECOA): Protects individuals from credit discrimination.
• Section 504 of the Rehabilitation Act of 1973: Forbids discrimination against individuals with disabilities in organizations receiving federal assistance.

These laws help secure housing rights for people with disabilities.

FAQ: Home Loans for Buyers with Disabilities

• Can someone with a disability get a home loan?
  Yes, options include FHA and VA loans, which offer flexible credit requirements and lower down payments.

• What assistance is available for adults with disabilities who want to buy a home?
  Programs like Fannie Mae’s HomeReady Mortgage and various grants designed for adults with disabilities.

• Are there home loans for individuals with disabilities who have bad credit?
  Yes, FHA loans are particularly suited to those with lower credit scores.

• Does HUD have a disability assistance program?
  Yes, HUD offers several programs to help individuals with disabilities access affordable housing.

Additional Resources

For more information on specific loans and grants for individuals with disabilities, explore these links:

• VA Loans for Veterans With Disabilities Simplified
• Why FHA Loans Are a Great Fit for People With Disabilities

The information on home buying for individuals with disabilities is extensive, but with the right resources and guidance, homeownership is an achievable goal.