Broke and Buying: Financial Options for Buyers with Money Problems

Written by Posted On Monday, 30 December 2013 09:43

For some, timing can be one of the biggest obstacles in making responsible financial decisions. No market holds this rule more firmly than real estate. Often, the ideal time for purchasing a new home and striking out on our own, whether alone or with a family in tow, can happen at a time in which one’s finances are in a less-than-ideal order. This causes many upstart families to settle for housing in low-rent apartments or in sketchier neighborhoods which quickly fall below their standards of living once they achieve financial footing. Being stuck with a lease in such a living environment can be a dismal situation.

Financing a home on a tight budget can be an enormous challenge, but a savvy buyer can find ways to make ends meet even if they aren’t exactly equipped to handle the financial burden from the start. Here are just a few options to consider when financing real estate when your cash flow isn’t yet ready for it.

Qualifying low interest loans

Depending on your individual circumstances, you might find that you are eligible for financing options that most buyers aren’t able to access. Holding a veteran status, or being a dependent of a veteran, can leave extremely low interest options available to you. With virtually no ceiling on how much you can borrow to finance your home, this can be the very best option for veterans.

However, even non-veterans can enjoy exceptional, special low-interest loans depending on where they search. Many homeowners in densely populated Native American centers have enjoyed the benefits of HUD 184. This program was designed by the government in 1992 to provide Native Americans opportunities since mortgage lending has been scarce in tribal regions. In addition to being one of the best financial options in these areas, it also helps keep tribal property within tribes in the event of a foreclosure.

It’s always worth doing your research to see if you’re in a position to qualify for special financing options before seeking out general options. Since most of these special options involve government support, loaners are often more available to provide more generous terms. However, if you don’t qualify for these programs, there are loan options available to just about anyone that might be preferable depending on your circumstances.

Traditional loan options

Fixed-rate mortgages are a generic solution that can be relied on, but it can be difficult to qualify if you have a middling to poor credit rating. This can be even more difficult if you’re attempting to acquire a jumbo loan, or a loan which surpasses predetermined loan limits. These loans can make the momentous interest on barely qualifying loans even worse.

When qualifying for these loans becomes difficult, loans provided by the Federal Housing Administration can be a vastly better route. An FHA loan also includes a far smaller down payment – as low as just three percent – which makes it better for families in dire financial straits in need of a home. While this can result in longer term payments and comes with a much shorter loan ceiling, it’s an effective option for lower to middle income households who are seeking standard urban or suburban housing.


These options are just a few that households can consider in tough economic times without having to compromise on their vision for what their standard of living should be. Signing a lease is a huge financial responsibility, so assaying your options and settling for satisfactory housing should be one of your very highest financial priorities.

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