Your Ultimate Guide To Home Loans For People With Disabilities

Everyone should have a safe and accessible home they can call their own. Owning property is an established path to building wealth, contributing significantly to the wealth you accrue by retirement age.

Aspiring homeowners with disabilities can face a unique set of challenges that might hinder their access to affordable housing and their ability to enjoy the dream of homeownership. Home buyers with disabilities can use this guide to explore valuable resources and tips to help them realize their home buying goals.

To qualify for disability benefits, the applicant must meet the requirements set by the Social Security Administration.

According to the Centers for Disease Control and Prevention (CDC), a disability is a physical or mental impairment that makes it difficult to perform certain tasks or to function and interact with your environment. Some of the most common types of disabilities can affect an individual’s:

• Vision
• Movement
• Thought process
• Memory
• Learning
• Communication
• Hearing
• Mental health

Yes, Social Security Disability Insurance (SSDI) and Supplemental Security Insurance (SSI) recipients can use their benefits to help qualify for a home loan. If you own an additional property that doesn’t qualify as a primary residence, it’s considered an asset and could affect your SSI eligibility.

SSDI doesn't have asset limits because it's considered an entitlement program, whereas SSI is a needs-based program. Talk to a home loan specialist to learn more details and create the best plan for your circumstances.

We’ll review five different homeownership loans and programs: conventional loans, Federal Housing Administration (FHA) loans, U.S. Department of Agriculture (USDA) loans, Department of Veterans Affairs (VA) loans and the Department of Housing and Urban Development’s (HUD’s) housing choice voucher program.

Individuals with disabilities are more likely to earn lower incomes, experience difficulties building a strong credit history and require accommodations in their homes. These programs offer options to help home buyers with disabilities secure mortgages and ensure their homes are accessible and safe.

Conventional Loans

Conventional loans have lower down payment requirements, which can prove valuable for home buyers with disabilities. They are conforming loans that satisfy the lending requirements set by Fannie Mae and Freddie Mac.

While eligibility criteria for conventional loans may vary by lender, most lenders commonly require:

• Requirements:
  • A credit score of 620 or higher
    
    
  • A debt-to-income ratio (DTI) no higher than 50%
    
    
  • A 3% – 5% down payment
    
    
• Note: The down payment for a second home or investment property will be higher
  
  
• Loan limits for 2023: $726,200 – $1,089,300 (for one unit, based on location)
  
  
• Great for: Lower-income buyers seeking down payment assistance

Freddie Mac and Fannie Mae, both government-sponsored enterprises, offer low down payment programs, including:

• Freddie Mac Home Possible: You can include co-borrowers who won’t reside in the home on the loan.
  
  
• Fannie Mae HomeReady: The program offers flexible funding for down payments and closing costs.

FHA Loans

FHA loans have helped many home buyers with lower credit scores or past credit and debt challenges close on a home. The Federal Housing Administration backs and insures FHA loans. Home buyers can purchase a home with lower down payment options than most conventional loans.

• Requirements:
  • A credit score of 580 or higher
    
    
  • A home appraisal by an FHA-approved appraiser
    
    
  • Additional home inspections may be necessary based on appraisal
    
    
  • Occupancy within 60 days of the closing
    
    
• Note: You can’t get a loan for an investment property or second home
  
  
• Loan limits for 2023: $472,030 – $1,089,300 (for one unit, based on location)
  
  
• Great for: Buyers with credit challenges

USDA Home Loans

There are two key USDA loans to know. The first is the Single Family Housing Direct Home Loan program, also called the Section 502 Direct Loan program. Lower-income borrowers who want to live in a USDA-approved community can apply for the Single Family Housing Direct Home Loan program. The second is the Single Family Housing Repair Loans & Grants program (or Section 504 Home Repair program). The program provides funds to low-income homeowners to improve, repair or modernize their homes and to low-income older adults to remove safety and health hazards from their homes.

Please note that Rocket Mortgage^Ⓡ doesn’t offer USDA loans.

USDA Single Family Housing Direct Home Loans

• Requirements:
  • Submit proof of not having access to safe, decent housing and your inability to secure a loan from other resources
    
    
  • Make the property your primary residence
    
    
  • Meet citizen or noncitizen requirements
    
    
  • Show ability to repay the loan and satisfy all its terms and conditions
    
    
• Loan limits: Depends upon the area and a borrower’s finances
  
  
• Great for: People looking for homes in rural areas

USDA Single Family Housing Repair Loans & Grants

• Requirements:
  • Live in the home as the occupying homeowner
    
    
  • Inability to obtain affordable credit elsewhere
    
    
  • A household income below 50% of the area median income
    
    
  • Age 62 or older for a grant and unable to repay a repair loan
    
    
• Loan limits for 2023: $40,000
  
  
• Grant limits for 2023: $10,000
  
  
• Total potential maximum: $50,000
  
  
• Great for: Older adults age 62 and above who need to make home modifications

VA Loans

If you’re a veteran with a disability, the Department of Veterans Affairs offers various programs and VA loans to help you buy or modify a house to fit your specifications. Visit the VA website for details on qualifying service-connected disabilities and the application process. We’ve included a summary below.

Specially Adapted Housing (SAH) Grant

• Requirements:
  • Own or will own a home
    
    
  • Have a qualifying service-connected disability
    
    
• Grant limits for 2024: $117,014
  
  
• Great for: Veterans who require extensive home modifications

Special Home Adaptation (SHA) Grant

• Requirements:
  • You or a family member own or will own a home
    
    
  • Have a qualifying service-connected disability
    
    
• Grant limits for 2024: $23,444
  
  
• Great for: Veterans who need less extensive home modifications

Temporary Residence Adaptation (TRA) Grant

• Requirements:
  • Qualify for a SAH or SHA grant (see above)
    
    
  • Temporarily living in a family member’s home that needs modifications to accommodate your needs. (TRA grantees don’t have to own the home.)
    
    
• Grant limits for 2024: $47,130 (SAH-qualified applicants) and $8,415 (SHA-qualified applicants)
  
  
• Great for: Veterans who require home modifications in their home or someone else’s home

Housing Choice Voucher (HCV) Homeownership Program

HUD’s Housing Choice Voucher (HCV) Homeownership program allows eligible recipients to use their voucher to help supplement homeownership costs and mortgage payments. Recipients with disabilities may be exempt from certain income and employment requirements that apply to non-disabled recipients.

• Requirements:
  • Complete a public housing agency (PHA) counseling program
    
    
  • Meet any additional requirements (get more requirement guidance from a PHA counselor)
    
    
• Great for: Buyers who need mortgage assistance

Aside from loans and grants, some organizations build accessible homes specifically adapted for people with disabilities.

Learn about these nonprofit organizations if you’re interested in additional assistance programs:

Habitat For Humanity

Habitat for Humanity is a global nonprofit that connects volunteers with families who need affordable housing to build homes together. Qualified individuals or families contribute with their sweat equity or attend personal finance or homeownership courses.

Eligible Habitat home buyers require better housing. They’re likely leaving an unsafe, inaccessible, damaged, poorly constructed or unaffordable property.

• Requirements:
  • In need of better housing
    
    
  • Willing to partner with Habitat for Humanity
    
    
  • Can repay the mortgage
    
    
  • An income that does not exceed 60% of the HUD area median income
    
    
• Great for: People who need a home and are willing to get involved

Homes For Our Troops

Homes For Our Troops is a nonprofit that builds and donates adapted, mortgage-free homes to veterans severely injured in the line of duty post 9/11.

• Requirements:
  • A letter of eligibility for the VA Specially Adapted Housing (SAH) Grant program
    
    
  • Retired or in the process of retiring from service
    
    
  • A background check
    
    
  • The home is the primary residence, and the borrower accepts the responsibilities of homeownership
    
    
  • Has resources to maintain the home, including upkeep, property taxes, home insurance, utilities, etc.
    
    
• Great for: Veterans with a qualifying service-connected disability

Rebuilding Together AmeriCorps

Rebuilding Together AmeriCorps has many local chapters. Each aims to serve a community through neighborhood rejuvenation and home repair projects. Check the local chapter in your area to learn how to get involved as a volunteer or recipient.

• Great for: Homeowners who need home repairs

Additional Resources For Individuals With Disabilities

Explore our list of additional resources and services:

• Accessibility and Home Safety Checklist: A checklist of standard home safety and accessibility features
  
  
• American Association of People with Disabilities: A disability-led organization that advocates for the rights of people with disabilities and provides resources
  
  
• Disability Benefits Help: Provides help with SSDI and SSI applications
  
  
• National Organization on Disability: Provides employment resources
  
  
• National Disability Institute: Provides financial education and free financial wellness tools
  
  
• National Council on Disability: Explore the organization’s list of resources from financial assistance to transportation to housing

Securing a home you can finally call your own will take more than searching for a home or mortgage. Explore our tips to help you confidently navigate the home buying process with the resources and support you deserve.

1. Know Your Credit Score And Improve It If Needed

Your credit plays a valuable role in the home buying process. Check your score before searching for your dream home to give yourself time to improve it if needed. For a conventional loan, you’ll need a 620 credit score. The minimum credit score for an FHA loan is 580. And you can explore home loan options for home buyers with low credit.

You can repair your credit score by paying off debt, paying your bills on time and disputing errors on your credit report. You can also hire a credit repair professional to help you fix your credit.

2. Work Through Your Budget And Know What You’re Looking For

Use a mortgage calculator to estimate how much home you can afford with your current expenses and budget, keeping in mind that you may need to set aside funds to remodel and make your home more accessible. The type of home you choose may impact the cost and types of renovations you can make. It’s important to know what you want and need before starting your home search.

3. Consider Extra Research

Keep these extra tips in mind throughout the home buying process:

• Ask the right questions: Before meeting with a mortgage lender or REALTOR^®, have a list of questions ready to ask them. If you need help figuring out the right questions to ask, check out these resources:
  • Questions to ask a mortgage lender
    
    
  • Questions to ask when house hunting or purchasing
    
    
• Get preapproved: Preapproval can help you establish a realistic housing budget and speed up the home purchase.
  
  
• Pay for a home inspection: Don’t skip the home inspection. The upfront cost to uncover potentially significant and costly conditions in a home can save you thousands in the long run. If the home requires extensive repairs, you may be able to negotiate a lower price.
  
  
• Research additional programs: If you’re an older adult, veteran, first-time home buyer or a lower-income borrower, look at additional programs beyond those that exclusively serve home buyers with disabilities.

4. Understand Your Housing Rights

There are laws and policies in place to ensure equal housing opportunities – and you must know your rights to recognize when they’re violated. We’ve gathered a list of critical legislation you should know:

• Americans with Disabilities Act (ADA): A sweeping civil rights law for people with disabilities
  
  
• Fair Housing Act: Prohibits housing discrimination based on disability or other protected characteristics
  
  
• Section 504, Rehabilitation Act of 1973: Ensures people with disabilities have equal access to programs or activities that receive federal financial assistance

Look into your state and local laws to learn all your rights. If you need legal advice, speak to an attorney or a disability advocacy agency. These resources are good places to start:

• National Disability Rights Network
  
  
• American Bar Association

Anti-Mortgage Discrimination

The Fair Housing Act and the Equal Credit Opportunity Act (ECOA) protect people with disabilities and other protected classes from mortgage discrimination. The Federal Trade Commission (FTC) has resources on mortgage discrimination, including information on income requirements, co-signers, application outcomes and what questions mortgage lenders can’t ask.

Reasonable Accommodations: HOA And Neighborhood

Under the ADA, you have the right to make reasonable accommodations to your residence. The Act should take precedence over a homeowners association’s (HOA’s) aesthetic guidelines or policies. You also have the right to reasonable accommodations in communal HOA facilities, like pools and gyms. Your HOA can’t interfere with your right to own a service animal. ADA statutes also apply to the public sidewalks and streets outside your residence.

Also, consider these Federal Housing Administration (FHA) standards when looking at condominiums and multifamily housing, public and communal spaces:

• Accessible entryways, doors, mailboxes, parking, switches and outlets
  
  
• Working ramps, railing and elevators
  
  
• Accessible bathrooms, kitchens and other common spaces

If you have experienced housing discrimination, you can reach out to your state agency or the Office of Fair Housing and Equal Opportunity (FHEO):

• Fair Housing Assistance Program (FHAP) by state
• Fair Housing and Equal Opportunity (FHEO)
• HUD – Report Housing Discrimination

Consider HUD Housing Counselors

Seek assistance from a HUD-certified housing counselor if you’re new to home buying or need additional guidance. Counselors are available at little to no cost. They can advise you on the home buying process and budgeting for a mortgage. They can also help connect you with local programs and help you figure out housing based on your finances and accessibility requirements.

Everyone deserves an accessible and safe home. The more informed you are about the home buying and mortgage processes, your rights, and the assistance you can receive from local nonprofits and federal programs, the better you can navigate your home purchase.

If you’re ready to explore your home loan options, start an application online with Rocket Mortgage. We can advise you on the best options for your home buying journey.