Grants For Felons To Buy A Home

When people search for grants for felons to buy a home, they’re usually hoping to find a special program that will help them get a fresh start. The truth is, there aren’t any felon-specific grants or homeownership programs.

That might sound disappointing, but it’s actually good news, because buying a house is mercifully free of the criminal background checks you’re used to as a renter.

Can Felons Buy a House?

Absolutely. Felons can buy a home just like anyone else. There’s no law preventing people with a felony conviction from owning property.

Mortgage lenders, grant providers, and first-time homebuyer programs are only focused on your financial situation (your credit score, income, employment, and debt-to-income ratio).

Your criminal history isn’t part of the decision-making process at all. The same loans and down payment assistance programs available to everyone else are also available to you.

When you apply for a mortgage, the lender won’t run a background check to see if you’ve got a criminal record. They only care about your ability to repay the loan. That means they check your credit report, your pay stubs, your tax returns, and your bank statements.

A person with a felony who has steady employment and good credit is just as likely to be approved for a mortgage as someone without a record. This is why you’ll often see ads for “home loans for felons” online.

In reality, those are just standard loan programs that felons will qualify for if they meet the requirements. The broker is marketing their service as something special, and you can be sure they’ll tag on a big fee. But you don’t need a special felon loan, when it comes to buying a house, your past doesn’t matter.

Related Topic: Who Qualifies For The Free $10,000 Home Improvement Grant?

Are There First Time Home Buyer Programs for Felons?

If you’re a first-time buyer, wondering if there are any programs specifically for felons, the answer is no. While exclusive programs don’t exist, felons can benefit from the same first-time buyer programs as anyone else. Here are a few of the most common.

FHA Loans

Popular for first-time buyers, FHA loans require as little as 3.5% down and have flexible credit score requirements.

Borrowers with a credit score of 580 or higher qualify for 3.5% down, while borrowers with scores between 500 and 579 need a larger 10% down payment.

Compared to conventional loans that look for minimum credit scores of 620 to 660, an FHA loan can help you get on the housing ladder if your credit score is less than perfect.

Learn more about FHA loans: https://www.usa.gov/government-home-loans

VA Loans

Felons who served in the military can apply for VA backed loans. These loans require no down payment, no private mortgage insurance, have competitive low interest rates, and limited closing costs.

VA loans are available from most lenders, and you can start the process by applying for your Certificate of Eligibility: https://www.va.gov/housing-assistance/home-loans/how-to-request-coe/

Learn more about VA loans: https://www.va.gov/housing-assistance/home-loans/loan-types/

USDA Loans

If you’re open to buying a home in a “rural” area, you could take advantage of a low interest, zero down payment USDA loan. To qualify, you’ll need a credit score of 640 or more, stable income, and employment history showing steady employment over the last 2 years.

Your existing debt payments and your new mortgage payment must not be greater than 41% of your income.

Check if your income qualifies: https://eligibility.sc.egov.usda.gov/eligibility

The USDA’s rural classification is broader than you think, with some small towns and outer suburbs of cities qualifying.

To find areas covered by USDA loans, drop your address into the map tool, then use the slider on the left to zoom out. Areas with a white background are eligible. Use property websites to search for homes in those areas.

USDA Loan Map: https://eligibility.sc.egov.usda.gov/

Grants and Down Payment Assistance

This is where the idea of “grants for felons” often comes from. While there aren’t felon-only grants, there are down payment assistance programs that provide real money to help you purchase a home.

For example, some city housing authorities will match your savings, cover part of your down payment, or provide a forgivable loan you don’t have to repay if you live in the home for a certain number of years. Nonprofit organizations and state-level housing agencies also run similar programs.

These grants and assistance programs are open to all qualified buyers, including those with a criminal record. If your income falls within the required limits and your credit score meets the threshold, you can apply and receive help just like anyone else.

In California, for example, the MyHome Assistance Program provides buyers with a deferred down payment loan of up to 3.5% of their home purchase price. This deferred loan doesn’t require repayment until the mortgage is refinanced, or the home is sold.

In Illinois, the Illinois Housing Development Authority offers variable amounts to help with down payments and closing costs. Up to $6,000 is available though their Forgivable Mortgage program. After 10 years, the payment is forgiven.

If borrowers choose the Deferred Mortgage program, they can get up to $7,500 which doesn’t have to be repaid until the home is sold or refinanced.

Borrowers looking for higher down payment assistance can get up to $10,000 as an interest free loan repayable over 10 years, through the repayable mortgage program.

These examples are fairly typical of the levels of assistance available across the country. Check which down payment assistance programs are running in your state: https://www.nerdwallet.com/article/mortgages/first-time-home-buyer-programs-by-state

Tips for Felons Preparing to Buy a Home

While your criminal history won’t stand in the way of homeownership, other challenges might. If you’ve got gaps in your recent employment history or damaged credit, getting approved for a mortgage is more difficult.

• Work on your credit. Pay down debt, avoid late payments, and check your credit report regularly for errors
• Show stable income. Lenders want to see consistent employment and regular paychecks
• Save for your down payment. Even if you qualify for assistance, having some savings shows financial responsibility
• Talk to a housing counselor. HUD-certified counselors can help you understand your options, build a plan, and connect you with local programs.

Remember, background checks are a barrier when renting, not when buying. As a buyer, the key is to focus on your financial readiness (credit, income, and savings) because that’s all lenders and assistance programs care about.

See Also: Is there a $7,500 single mother grant?