Can I Buy A House If I Make 25k-30k?

Can I Buy A House If I Make 25k-30k?

Can I Buy A House If I Make 25k-30k?

Buying a home in the USA is not as easy a process as walking into a bank, signing paperwork, and you are done with the process. Many people cannot afford to buy a new home with cash despite their income. They have to borrow an amount from a bank. 

Like taking a loan is a complex process, similarly, qualifying and applying for a mortgage is also difficult. It can especially be terrifying for first-time homebuyers, from down payments to credit scores. It is almost impossible for those who have earned up to $25k per year for those who have earned it. The good news is that there are many options for buying a new home. Many programs are designed to assist anyone who wants the ownership of a home, no matter how much money they earn. 

Is 20k-30k Enough To Purchase A New Home?

Surprisingly, YES. This amount is very close. However, it is possible with good credit and adequate income. Even though the median home price is almost $1M in the Bay area and sometimes needs a $200k downpayment, there are still many good single-family houses in South Bay below $600K. Low-income households refer to those in which one person earning is below $25,000, or two or more people have income between $25k and $50k combined. 

On the other hand, the buyers who have a $40k income per year are still required to pay down debt, save cash, and qualify for a mortgage. The conclusion is that it is possible to buy a new home on a middle-class salary (in some places). You can buy your home at the age when you comfortably afford the payments and handle the unexpected repairs. Most importantly, live in a home as long as you cover the buying and selling of the house. Legally, in most states, you must be 18 to buy a new home.

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Home Loan Programs For People Having Low-Income

When you want to buy a home with a low income, you may face some problems. If you have a low income, there are many options to help you purchase a new home. However, it is hard to save for a down payment while renting. And it may be difficult for you to keep your debt-to-income ratio and credit score intact. Here is a brief overview of the loan programs that help people to have their own homes. 

Federal Housing Administration (FHA) Loans

One of the best options for new home buyers to buy a new home is to pursue a loan from FHA. In addition, as it is part of the US Department of Housing and Urban Development (HUD), the Federal Housing Administration gives mortgages. So lenders can provide loans with possible down payments, allowing them to buy a home with fewer savings and lower incomes. Usually, FHA loans have a 3.5% down payment requirement compared to the 20% needed by a conventional mortgage. It depends on the lender you use, and you may get an FHA loan with a credit score of 580 and a debt-to-income ratio of 45%. So, always choose the lenders that allow credit scores starting at 500, or as long as the purchaser will make a 10% down payment. 

FHA loans are great for buyers having low credit scores or high debt. Easier to qualify as compared to other loan options.

First-Time Homebuyers Loans With Zero Down

First-time home buyers with low or moderate incomes can also qualify for the zero-down loan options. Furthermore, housing loans insured by the USDA want to invest in specific rural and suburban areas across the country. Likewise, loans assured by the US Department VA (Veterans Affairs) help current or former military members purchase a home. 

VA Home Loans

The VA mortgages are not bound to low-income home buyers, but it is very helpful for many reasons. Firstly, under this program, there is no limit to the minimum credit score. Secondly, there is no limit for a down payment; however, you may finance 100% of the buying price. Thirdly, they offer no mortgage insurance. So finally, a VA mortgage makes sellers pay more than 4% of the buying price. So if you are lucky and get a motivated seller, you can get home with nothing out of pocket. 

USDA Mortgages

If you don’t want to buy a house within the city areas, you may apply for USDA home loans. They created this loan to assist the people having low and moderate-income borrowers purchase new homes in rural areas. With this loan, you may buy a home with no money down. In addition, you can find out if the property is in a USDA eligible rural area or if you can meet local income limits with the help of USDA eligibility maps. However, USDA loans are of two types. One is for the buyers whose income should not exceed 115% of the Area Median Income (AMI). The other one is for those with 50%-80% income of the AMI. 

Down Payment Assistance Programs

Down payment assistance is the same as it sounds. It aids with the down payment and sometimes the closing cost of buying a home. Government companies and nonprofits may present DPA programs, and there are many other sources. They normally take the form of loans and grants. Furthermore, most of the DPA programs target people who have low-income home buyers. They have some guidelines which make it easier to qualify for the loan. Sometimes, they provide help to people who purchase in “underserved” or “redevelopment” areas irrespective of their income. Surprisingly, people who qualify for this loan never apply for it – as they don’t know that this loan exists.


Low-income homebuyers can also get loans or grants to own their new home, whether they have income under $30k. You have to ask several lenders to choose the best deal for you. With good credit and adequate income, you can own a new home if you have revenue between $25k-$30k.