Qualifying for a mortgage after divorce can be a challenge. Because you need adequate income to qualify for a home loan, meeting the income requirement could be tough without your spouse's income in the mix. But lenders have embraced policies and loan programs with less stringent lending standards and lower loan costs that make it easier and more affordable for divorced women to become homeowners.
Receiving Income from Spouse
Alimony, child support or maintenance income you receive from a former spouse can help you meet a lender's income requirements to qualify for a mortgage loan. Before considering the payments as income on your loan application, a lender may ask to see a legal separation agreement, court order or final divorce decree. Usually, a lender will request proof in the form of canceled checks, bank statements or tax returns that you have been receiving payments for a period of at least 12 months. The payments must continue for the first three years after you take out the mortgage.
Qualifying for First-time Home Buyer Assistance
Even if you owned a home with your spouse or your name appears on the deed, you can still qualify for a first-time home buyer loan as long as you never owned a home on your own. Department of Housing and Urban Development Section 956 states that neither a displaced homemaker nor a single parent can be denied federal assistance for first-time home ownership. You qualify as a homemaker if you did not work outside of the home for a number of years and were primarily responsible for caring for your family and home.
Applying for FHA Mortgage Loan
Loan programs backed by the Federal Housing Administration offer applicants more flexible guidelines for qualifying for a home mortgage. For example, FHA lenders accept lower credit scores, allow you to make a down payment as low as 3.5 percent of the home's purchase price, and will include most of the closing costs in the loan. Manual underwriting allows FHA lenders to consider compensating factors, such as the loss of a spouse's income in the household. Like a conventional mortgage loan, the lender will require proof of income and debt load when you apply.
Qualifying for Public Housing Homeownership Program
If you live in public housing following divorce, you may be eligible for a public housing resident ownership program through HUD Section 32. The program allows local public housing authorities to sell housing units to individuals or families who qualify. Eligibility requirements include not earning more than 80 percent of the area median family income. You also must be able to afford the mortgage payment which should be no more than 35 percent of your household income and make a minimum down payment of 1 percent of the price you are paying for the home.