Home Buying in Atlanta>Question Details

Sincere, Home Buyer in Florida

Can someone on Social Security & NO Credit purchase a HUD Home?

Asked by Sincere, Florida Sat Aug 3, 2013

can someone give me info on people who receive social security disability purchase a home? A first time home buyer program perhaps? Or any grants out there for people in my current situation? I do not have established credit but am very much interested in possibly owning my first home, a HUD home, it doesnt have to be fancy it can be a fixer upper! I live in Florida, trying to relocate to Georgia preferrebly outside of Atlanta! Please be detailed if you have info!

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Yes, social security benefits will count as qualifying income. In addition, you will also need a qualifying credit score and history. There are also a couple of down payment assistance programs for first time homebuyers such as the GA Dream program which provides either $5000 or $7500 in down payment assistance depending on if you meet their program requirements.

LaShonda Solomon
Associate Broker
Keller Williams Realty Signature Partners
(678) 477-5226
0 votes Thank Flag Link Wed Aug 7, 2013
Social security income is increased by 125%. If you make $1000 a month, lenders give you credit of $1250 in income.
With no credit, like zero credit (no collections, no judgments, no bankruptcies), you can use alternative credit as stated below. They may limit your income to 40% of the grossed up amount to qualify for the loan. In this case, around $500 minus taxes, minus mortgage insurance, minus home insurance. This puts you into a $60k home if you make that much.
Try a USDA loan for 100% financing with no mortgage insurance. They have great programs. The credit requirement or lack of is very liberal.
Best bet? Lease purchase a house for a year and get your credit going as stated using secured credit. Save money so you can fix things when they break down. I think it would also benefit you to take a first time home buyers course offered by HUD.
0 votes Thank Flag Link Sun Aug 4, 2013
As long as you are receiving Social Security retirement income that is sufficient for your debt to income ratio, then that may very well an acceptable income source. There are different types of income paid out by the Social Security Administration, so no one can give you a definite answer to that question without first revieiwing your documentation.

I am not aware of any lenders who will approve a Primary borrower with no credit score. Under FHA, we will allow a Co-Borrower to not have a credit score, but the owner occupant Primary Borrower must have an acceptable credit score.

For an FHA mortgage, most lenders require a 640+ credit score for the last 3-4 years now.

Prospect Mortgage is one of the few direct lenders to offer an FHA 580-639 FICO loan program. Credit profile is a major factor in a mortgage approval. Generally, there should be no late payments, new collections accounts/charge-offs/liens/judgments in the last 12 months. It is required that all open collection accounts must be paid in full if their cumulative balances exceed $1,000.

The 3.5% minimum down payment can be from the borrowers own funds or it can be gifted from a family member. Two months of reserves for the PITI (Principal + Interest + Taxes + Insurance) payment + HOA Dues will be required. This must be from the borrower’s own funds and not a gift. FHA loans will allow a seller contribution toward closing costs/pre-paids of up to 6% of the sales price.

To build positive credit, you typically need to have 2-3 trade lines reporting for 12-24 months. There should be no late payments or other derogatory items reported in the last 12-24 months. On your Revolving credit accounts, your outstanding balance on your monthly statement should not exceed 30% of the credit limit.

If you are looking to purchase a property, working with a knowledgeable and seasoned loan officer is critical in today's market. Getting Pre-Qualified is the only way for you to find out your mortgage options. To get Pre-Qualified for your purchase, you can submit your request online at http://www.rodneymason.com.

Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia with over a decade of mortgage lending experience.

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing.
0 votes Thank Flag Link Sat Aug 3, 2013
Hi Savion,

The social security income fine but generally most lenders require that you have some credit and a credit score of at least 600.

Ava Anderson
Solid Source Realty Inc
770 369-5121
0 votes Thank Flag Link Sat Aug 3, 2013
The two are not related to purchasing a home. Yes, you can purchase if you receiving social security, and no you must have at least a 620 credit score, with 2 or 3 open lines of credit. If you need help I suggest you call a ;loan officer at bank in the city that you are located. if you take 3 ,4 or 6 months and prepare your credit to buy a home it will be a lot easier.
0 votes Thank Flag Link Sat Aug 3, 2013
If you can get the financing you can get a HUD home.. I know of a few lenders that could possibly pre-Qualify for less that the standard minimum but your income will definetly play a factor & yes mam their are some great first time home buyer programs that your credit score will play a factor in. Georgia Dream is one of the first time home buyers program let me know if I can assist you any further. Kaylane Peters. Coldwell Banker Residential Brokerage. Licensed in Ga. & La. 404-907-0798. Kaylanesellsluxury@hotmail.com
0 votes Thank Flag Link Sat Aug 3, 2013
Social security is not an issue unless your SS income is too low.
No credit can be overcome with Alternative Credit. Utility Bills. Cell Phone, Etc.... can be used to establish a payment history if your in a pinch. In the mean time you can help your self establish Credit by getting yourself a Secured Card (google Secured Cards for banks that offer them). A Secured Card is essentially a Savings account tied to a Credit card vs. a Check Card. They require no Credit Pulls to establish and once in place will quickly place you in a credit scoring model.

If you need any help with your move to Atlanta please let me know, I'd be happy to help.

Best Wishes,

Rob Robbins
Senior Mortgage Consultant
Cornerstone Mortgage Group
6151 Powers Ferry Road NW
Suite 610 Atlanta GA 30339
Office 678-578-7613
Cell 404-932-5353
Fax 678-388-1336
0 votes Thank Flag Link Sat Aug 3, 2013
Possibly, but most lenders will not make loans below 50,000 and given social security income, you may below this price.

0 votes Thank Flag Link Sat Aug 3, 2013
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