Primary sources of special, low income housing programs include state and local housing finance agencies, nonprofit housing assistance groups, the Department of Housing and Urban Development (HUD), and secondary mortgage market operations such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). Your loan officer should be able to tell you how to contact local offices of organizations which work directly with borrowers, or you can usually find them in the phone book in the blue government listings under “Housing.”
Assistance for low and moderate income home buyers is not only based on direct subsidies but also on relaxation of standard loan approval requirements. For instance, many low income families spend a greater percentage of their income groups. If you can show that you have consistently handled such higher payments and have a good credit record, the lender might approve the loan based on higher debt ratios.
Some potential home buyers have trouble getting a loan approved because they have not established a credit record. There is nothing adverse on the credit report, but there is no record of prompt repayment of loans or charge accounts. If this is your situation, you may be able to qualify based on what is called a “non-traditional credit history.” Using this approach, the lender will depend on utility companies, past and present landlords, and other sources which can verify that you have met a regular payment obligation in a timely, consistent manner. If you think such an approach might help you, and the loan officer has not mentioned it, suggest it to the loan officer.
A Rejection Is Not Your Last Chance
The fact that a lender has rejected your loan application does not mean that you are denied home ownership forever. As has been discussed earlier, there are positive steps you can take to correct the problem. Some problems may be resolved very quickly while others may take longer, but you can turn around most problem situations. Take the time to determine exactly why your loan request was denied, and then take steps to eliminate the cause of rejection.
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