New Horizons Un-Limited Inc. New Horizons Un-Limited Inc.
March 31, 2002 [Revised April 30, 2002]
Buying a home for people with disabilities is greatly complicated when it comes to the financial burden of buying a home. People with disabilities face unique needs and issues such as poor credit histories and fixed or limited income which restricts their ability to save money for downpayments, closing costs, costs of maintaining a home or making access modifications or repairs. However, recently, there is much being done to provide systematic and strategic approaches to offer homeownership opportunities to people with disabilities.
Each community and each state in the United States has unique opportunities and barriers for finding accessible, available and affordable housing for people with disabilities. Many states and communities are forming coalitions that are committed to helping people with disabilities become homeowners. Housing coalitions have broad-based memberships, leaders in lending, housing and the disability community, knowledge of the housing system and resources and access to these state and local resources to alleviate some of the financial burden of buying a home. They provide housing counseling to prepare a person with disability to become a homeowner.
Recent legislation has also offered new options in homebuying. For more information, see the NHU editorial on New Legislation Makes It Easier For Homeownership To Be A Housing Option for People with Disabilities.
To look at past and present options, NHU presents the following:
The purpose of this guide is to provide information for people with disabilities who are 18 to 59 years of age, and does not necessarily offer information specifically for the elderly.
New Horizons Un-Limited assumes no responsibility in guaranteeing the services, programs or conditions as described. If you are interested in a resource listed below, call or contact the resource to verify the current situation. Evaluate information and make your own decisions when using this guide.
The following is a quick outline of this guide, click on the link to go directly to the section of your choice.
One may be able to use trusts to facilitate homeownership for a person with disabilities. Trusts are legal financial plans that allow family members to contribute to the long-term housing needs of a disabled family member. A trust is set up so the money received from the trust is not counted as personal income for the disabled person and therefore will not jeopardize the person's eligibility for government benefits such as Medicaid and Social Security Income (SSI). Generally the money is paid at the discretion of the trustee who assumes the responsibility for the expenditure of the funds and does not pay this money directly to the individual. There are two different kinds of trusts: Special Needs Trusts and Pooled Trusts.
Special Needs Trust
"This trust must be created before the person with the disability turns 65. The parent or family member creates this trust with personal financial resources, money from inheritance, a medical malpractice award or a personal injury award. Upon the death of the beneficiary, the state may require repayment from the trust for any medical assistance that was provided during the term of the trust." "Trusts and Home Ownership," Opening Doors, December Issue, 1998. For more information on this article, e-mail Opening Doors.
Pooled Trust
There is no age limitation for a pooled trust. This trust is set up through a non-profit organization for an individual account created by the family for their disabled family member. The non-profit organization may require a fee for assuming the responsibility of administering the trust. Pooled trusts are usually set up by families who will not be able to administer the trust directly or are able to create a smaller trust. As with special needs trusts, the state may require repayment from the remainder of the trust for any medical assistance.
Through a letter of intent or a life care plan, family members can ensure the long term care of a disabled family member. This letter can be a simple outline of where the disabled person wants to live or with whom and what services and supports are needed or wanted. Even small contributions to a trust started early can enhance access to housing and related supports. Families can ask a bank or financial planner to be co-trustees which will help to oversee the management of the trust for monthly disbursements, oversee investments, pay the taxes and assume the legal responsibilities.
If you wish to set up a trust, contact a lawyer who is very familiar with your state trust laws and federal SSI and Medicaid regulations.
This section on trusts was derived from "Trusts and Home Ownership," Opening Doors, December Issue, 1998.
The Department of Housing and Urban Development (HUD) issued, as of October 12, 2000, the final regulation, "An Overview of the Section 8 Homeownership Program: Final Rule," which states that Section 8 vouchers used to pay as much as 70% of fair market rent, can now be used to pay a portion of a monthly mortgage payment. What you need to know is; (1) not all housing agencies are required to participate, and (2) persons must meet requirements.
The following was derived from "Homeownership and Section 8 Voucher" by Lee Schulz, Breaking Away, v. 22 #3, Fall 2001, IndependenceFirst and "Owning A Home of Your Own, Expanding Our Thinking on Housing Choice" by Charlene Dwyer and Jerry Vogt, EBTIDE, Inc.
To contact your local housing authority, look in the yellow pages under Public Housing Authority. If your local housing authority has not created this option, call your local Center for Independent Living or advocacy organization and find out what they are doing locally to help create this option. For your local Center for Independent Living, see NHU's resource page, Centers for Independent Living.
The Housing Authority for the City of Milwaukee is participating in the Section 8 program. The number in Milwaukee to call is (414) 286-5678.
There are more eligibility requirements, so be sure to read the "Section 8 Homeownership Program: Final Rule." The Section 8 Voucher is only one option that you should consider in low-income homebuyer assistance programs. Consider the following additional options.
Under the American Homeownership and Economic Opportunity Act of 2000, a public housing agency may in lieu of providing monthly assistance payments may provide assistance for a family in the form of a single grant to be used only as a contribution toward the downpayment required in connection with the purchase of a dwelling for the year and each year thereafter.
There are additional requirements such as income requirements and required participation in a homeownership and housing counseling program.
The following list of resources for homebuyer assistance programs is provided by New Horizons Un-Limited:
Consumer Information on Reverse Mortgages provides consumer information on reverse mortgages from the only independent non-profit national organization specializing exclusively in reverse mortgage analysis education. This site is sponsored by the National Center for Home Equity Conversion Mortgage, a nonprofit organization dedicated to reverse mortgage analysis and consumer information on reverse mortgages.
Fannie Mae, is the Federal National Mortgage Association. Fannie Mae operates under a congressional charter that is directed toward increasing the availability and affordability of homeownership for low-, moderate-, and middle-income Americans. This website of the FannieMae Foundation provides extensive information on mortgage loans to single-family, multifamily, housing and community development, as well as, company news, listings of property on-sale, business opportunities with the foundation and information to both investors and consumers. Visit your local Fannie Mae office to find out about lenders in your community.
Housing Consortium for Disabled Individuals offers more opportunity to live where you want. Contact David Black, Deputy Secretary, Department of Community and Economic Development at (215) 895-5692.
National Home of Your Own Alliance has "A Home of Your Own Guide" with many funding sources. The National Home of Your Own Alliance is a partnership between the federal government and non-profit advocacy groups to create housing for people with disabilities. The Fannie Mae's "Home Choice" mortgage guarantee program that promotes homeownership for people with disabilities is part of this partnership. Through this program people with disabilities can apply for a single family mortgage loan for low to moderate income persons with disabilities with nontraditional credit histories. This program offers lower downpayments. You can order a paper copy of the new "Home of Your Own Guide: A Resource for Housing Educators and Counselors to Assist People with Disabilities" by calling the Fannie Mae distribution center at (800) 471-5554.
Neighborhoods Online is a national on-line resource center for people working to build strong communities throughout the United States. Neighborhoods Online was created in 1995 by the Institute for the Study of Civic Values and Philadelphia's Libertynet.
Resna's "Making Homes Accessible: Assistive Technology and Home Modifications" is a very comprehensive guide on resources for housing. This guide is produced by the Resna Technical Assistance Project and provides information about assistive technology and home modifications. The guide covers definitions of universal design; housing laws and guidelines; initiatives from the Assistive Technology Act grantees; advocacy, financing, modification, and research resources; accreditations; online courses; and a bibliography. Please link to the project's Internet homepage at Resna Technical Assistance Project. Click on Policy Information Pipeline, under Major Policy Areas. Then click on Community Living. Find this article under Housing or call (703) 524-6686.
U.S. Department of Agriculture: Rural Development- Building a Better America
U.S. Department of Housing and Urban Development (HUD) is also providing FHA lenders guidance on how to accommodate persons with disabilities in qualifying for a mortgage. HUD funds programs available in your area. Search the site to visit the HUD office nearest you, local homebuying programs or check out the HUD disabilities page. HUD also includes a list of agencies by state that offer housing counseling. This list is HUD-approved. These housing counseling agencies are funded by HUD and can give you advice on buying a home, credit issues, reverse mortgages. Contact the agency nearest you or call (888) 466-3487.
Pennsylvania:
Housing Consortium for Disabled Individuals serves members and friends of the disability community and housing industry by fostering the development of safe, affordable, barrier-free housing and providing housing services to people with disabilities. Call (215) 528-5847.
Pennsylvania Housing Finance Agency (PHFA) as of November 9, 2000 offers that Fannie Mae and the Pennsylvania Department of Public Welfare have agreed to new guidelines to significantly expand the Access Home Modification Program, initiated in 1999 to fund accessibility improvements for home purchasers. If you live in Pennsylvania and are a person with disabilities you can receive up to $25,000 to help buy a home and make the home accessible. If you are interested in the program (or if you are from another state and would like to see how it works,) you can get additional information including participating lenders on the PHFA website or by calling the toll-free, mortgage hotline at (800) 822-1174. PHFA Access Home Modification Loan Program offers deferred loans for first time homebuyers.
Texas:
Texas Home of Your Own Coalition is a joint Home of Your Own and Home Choice coalition lead by United Cerebral Palsy. By making the coalition a homeownership program rather than specifically a disability program, the coalition was able to meet the needs of any first time homebuyer and was able to expand its membership beyond the disability community finding resources for the costs that would be encountered. The coalition does have a commitment to "make the system work for people with disabilities." The coalition formed a partnership with the Texas Department of Housing and Community Affairs (DHCA) to help increase the coalition's access to HOME and Community Development Block Grants (CDBG) and funds for down payments, closing costs, and accessibility modifications for people with disabilities who become homeowners. The coalition is forming partnerships throughout the state and offers housing counseling.
Wisconsin:
State of Wisconsin EBTIDE, Inc. and Movin' Out offer help in acquiring downpayment grant assistance from the Federal Home Loan Bank of Chicago and the City of Milwaukee to get people with disabilities included in the Section 8 Homeownership Program.
Wisconsin Affordable Assisted Living
Wisconsin Council on Developmental Disabilities (WCCD) publishes the "Community Supported Living Series," a set of guides that assist people with disabilities in how to find supportive living in their own communities. For more information, contact David Porterfield by phone at (608)258-5560 or e-mail davidp@terracom.net.
Wisconsin Department of Health and Family Services (DHFS) offers an overview of Housing Assistance Programs geared toward assistance with renovating and weatherizing existing housing. Check with your local city or county housing authority or the local Rural and Economic Development office, and with the local social services or human services department for current information.
Wisconsin Division of Housing, Federal Home Loan Bank of Chicago, and local lenders provide access to grants to assist with down payment or closing costs.
Wisconsin Homeownership for People with Disabilities Collaborative Initiative, is in Brookfield, Wisconsin. Contact Charlene Dwyer at (262) 782-2480. This Wisconsin initiative is a multi-agency, statewide project serving low and moderate income (household income less than 80% of their county median income) for people with disabilities and or family member with disabled dependents. This initiative was started to meet the accessible housing shortage and low homeownership rate for the severely disabled. Free training seminars are provided at the eight Independent Living Centers throughout the state (see Centers for Independent Living in the state of Wisconsin under Disabilities Physical, Independent Living Centers) on home buying for persons with disabilities, lenders, housing counseling agencies and staff. Disabled homebuyers in Wisconsin can apply for mortgage products that are specifically designed for them. The mortgage underwriting guidelines account for the low income, assets and co-borrow circumstances that are typical among people with disabilities and their families. For more information, see the article, Best Practices: Wisconsin.
Wisconsin Housing and Economic Development Authority (WHEDA) and local lenders provide access to debt financing and can develop creative underwriting techniques to make home purchase affordable to people with disabilities. This site offers information for homebuyers in a guide on the Homebuying Process, WHEDA in your area, Target Area Maps for single-family home buyers, Guide to the Development of Affordable Multifamily Housing, HUD information, Mortgage Calculator for Home Buyers and more.
Wisconsin Partnership for Housing Development, Inc. works with financial agencies and institutions to help make home buying affordable to people with disabilities and their families. The Wisconsin Partnership is administrator of Downpayment Plus, the Federal Home Loan Bank of Chicago's (FHLBC) Affordable Housing Program. Through Downpayment Plus, eligible first-time Wisconsin home buyers can receive grants of up to $3,000 toward a down payment, closing costs, reserves or other expenses related to home purchase. For more information, visit the Downpayment Plus Consumer Center on this site. This site also offers a list of Wisconsin's Community Housing Development Organizations (CHDOs).
Wisconsin Supported Housing Network is a cooperative and collaborative effort to promote homeownership for people with disabilities and their families. This network offers a network of resources to make homeownership possible for people with disabilities: (1) Access to financial resources, (2) Access to comprehensive housing counseling, and (3) Access to a local support organization such as Movin'Out which helps coordinate the networked resources. "Wisconsin Supported Housing Partnership" by David Porterfield and Sue Fieber, Wisconsin Partnership for Housing Development, Inc. in December issue of Opening Doors.
The Consolidated Plan offers federal housing funds to communities that can pay for first time homeownership program costs such as down payment assistance, closing costs, and accessibility modifications. There are several plans offered through The U.S. Department of Housing and Urban Developement (HUD) and the Consolidated Plan. Information on these programs is available from Community Connections: (800) 998-9999. These programs are available at the state and local government levels. Disability housing coalitions must work with lenders and local government officials to offer these programs to people with disabilities. HUD recommends the following when looking for affordable homes.
Many home loan programs offer the additional help in accessible home modifications for the disabled home buyer. Some are listed above. For more information on financial assistance on making accessible home modifications, see the NHU guide, Guide to Buying a Home for People with Disabilities: Accessible Homes and Accessible Home Modifications.
There are loan programs that also offer programs for low-income families for the rehabilitiation of a home. This loan can help a home meet minimum standards for "decent, safe and sanitary" housing and to make homes accessible to persons with disabilities. Rehabilitation mortgage insurance (Section 203(k)) enables homebuyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or to refinance the rehabilitation of an existing home. This insurance is possible through FHA approved lending institutions and eligibility requirements do apply. Many rehabilitation costs are covered including enhancing accessibility for a disabled person. Applications must be submitted to the local HUD Field Office through the FHA lender. See the HUD website for directory approved lenders.
There are also loan programs designed to enable homeowners with low or moderate incomes to repair and improve their homes. Under Title I, HUD insures lenders against most losses on home improvement loans. Title I loans may be used to finance permanent property improvements that protect or improve the basic livability or utility of the property. The loans can also be used for fire safety equipment. Only lenders approved by HUD through the FHA can make loans covered by Title I insurance. HUD recommends working directly with the lender in selecting a home repair contractor in order to prevent shoddy work, falsification of documents, overcharging or deceptive advertising by the contractor. For more information, see the Home Improvement Insurance Branch of HUD.
There are also energy assistance and weatherization programs to assist low-income homeowners. The Low-Income Energy Assistance Program provides energy assistance for low-income homeowners. Eligibility is limited to low-income households that show an "energy burden." Contact your county Energy Assistance Program. Free weatherization is available for low-income customers through gas and electric utility companies. Contractors are hired to install insulation, as well as to caulk and weather strip. Call your local utility company for further information.
Depending on your disability you may also qualify for assistance for home modifications through your state's Medicaid waver program, vocational rehabilitation agency or worker's compensation.
If you are a veteran and qualify, you may be able to qualify for a grant, supplemental financing loan or housing insurance through the Veteran's Administration.
Fannie Mae is a private, shareholder-owned company that invests in mortgage lenders to create source of mortgage funds that the lenders can make available to people with disabilities. Fannie Mae has offices throughout the United States, see Fannie Mae offices in Minnesota, Indiana, Wisconsin, Illinois, North Dakota, South Dakota. HomeChoice was developed by Fannie Mae to meet the mortgage underwriting needs of people with disabilities or people who have family members with disabilities of low and moderate income. Fannie Mae approved lenders work together with organizations to create homeownership opportunities for people with disabilities. Groups of organizations, including lenders, state and local housing authorities, disability agencies, support service organizations, people with disabilities and their families form a coalition. The mortgages they offer are fixed rate loans with 15-to 30- year terms. These mortgage loans offer lower down payments, underwriting standards that allow the borrower to qualify for a loan based on one's personal budget, acceptance of nontraditional credit histories, and support from the various organizations that will help the borrower toward successful home buying. This support offers programs of homeownership education and counseling, grants and assistance to help borrowers obtain their mortgage loan and keep their obligations.
To be considered for a HomeChoice mortgage loan, call the contact organization in your state. If you do not live in a state with a homeownership coalition, call the National Home of Your Own Alliance at (800) 220-8770. For additional information, call Fannie Mae's Public Information Office at 1(800) 7FANNIE or (800) 732-6643.
Fannie Mae, Milwaukee Office offers low down payment plans, programs tailored to a particular group and two-in-one purchase/rehabilitation loans for older housing.
Milwaukee Department of City Development sponsors the program of "Duplex as a Starter Home." Contact the Department of City Development at (414) 286-5830.
Neighborhood Housing Service, in Milwaukee, call (414) 449-2516.
Project HOPE funding to help individuals in Milwauakee to purchase homes in the target area 33rd to 54th St. and North Ave. to Concordia, call (414) 449-2690.
South Community Organization 1635 South 8th Street, Milwaukee, rehabilitates homes on the southside to sell to eligible purchasers. Homes sell for under $50,000. Call (414) 643-7913.
Walkers Point Redevelopment Association, in Milwaukee, call (414) 645-9222.
Wisconsin Housing and Economic Development Authority-(WHEDA) Madison (800) 33HOUSE or (608) 266-7367 or in Milwaukee, call (800) 628-4833 or (414) 227-4039.
Once you determine what kind of financial assistance is available to you, you will be able
to figure out how much you can afford. (WHEDA) Wisconsin Housing and Economic Development Authority can help you determine how much you can afford.
The following resources offer mortgage calculators to assist you on calculating your monthly costs based on interest rates and loan amounts, determine the real cost of your debt and help you consider what it will take to reach your goals.
Bankrate will help you find the lending rate. Interactive calculators allow you to check out monthly costs based on interest rates and loan amounts. On this site
you can calculate your payment on any loan, calculate what will it take to reach your investment goal and calculate the real cost of your debt.
Domania offers over 300,000 home listings. This site offers price histories, recent home sales by location and price and a mortgage calculator.
Easier Home Loans covers home-buying essentials, including loan application, mortgage rates and credit considerations.
E-Loan offers advice with no obligation and other tools such as a glossary of terms, home mortgage calculators and FAQ.
Interest offers a First Time Buyer's Guide which includes information
on loan programs, mortgage term glossary, the homebuying process, advice and opinions and mortgage calculators.
Homestore includes finance and insurance, homes for sale and an easy to use mortgage payment calculator right on the home page. The many resources on this site are geared toward helping you.
Homefair is a homebuyer's fair including real estate, mortgage loans, moving resources, calculators and home buying guides.
Lending Tree offer calculators, loan resources and FAQ's.
Morgage Mag contains information on mortgage lending, banking and more.
The Mortgage Mart offers mortgage lending, banking and more.
Mortgage 101 provides step-by-step guides, downloadable forms, interest rate surveys and information on home insurance rates.
Quicken will help you calculate, rent vs mortgage refinancing and home affordability costs.
Homeowner's Insurance
Homeowner's insurance combines protection against damage to your property, house and its belongings and protects against claims of negligence or inappropriate action concerning the property that would result in someone else's injury or damage to someone else's property. The lender may ask for proof of this insurance or will collect from you during the year in your monthly mortgage payment and will put a portion of each payment for this insurance in an escrow account. This insurance is usually required by the lender to protect their investment, however, acquiring the insurance, the terms of the insurance, reviewing the terms for adequate coverage and paying for the insurance will be your responsibility.
Flood Insurance
This insurance may not be necessary and does not come standard on a homeowner's insurance policy.
This insurance protects the homeowner against loss from flood, thawing and hurricanes. If the house is located on a flood plain, the lender will require this insurance before approving a loan. The Federal Emergency Management Agency (FEMA) defines flood zones on their maps.
Mortgage Insurance
This insurance protects the lender against loss if the borrower were unable to make their monthly payment and defaults completely on their mortgage loan. If you as borrower can only make less than 15-20% downpayment for the mortgage loan, the lender my require this insurance. The 203(k) FHA mortgage insurance program helps the homebuyer to purchase and rehabilitate a house with a single mortgage loan.
Mortgage life, disability or unemployment insurance
This insurance is term life insurance that diminishes over time as you pay off your mortgage. This insurance will pay off the
remainder of the mortgage if you die and pay a certain number of monthly payments if you become disabled or unemployed.
If you are disabled or unemployed prior to seeking mortgage pre-approval, this insurance would not be reasonable to purchase.
Title Insurance
This insurance protects the lender against any claims that may come up about who legally owns the property. This insurance is also available for the homebuyer. A title search will check the public record to be certain the seller is the legal owner of the property and discover any liens or claims against the property. Ask your lender if this insurance will be necessary.
Personal Property Insurance
Personal property is usually covered from theft on your homeowner's insurance. Check the conditions under your
homeowner's policy for coverage of theft of household goods. If you wish to cover your household goods during moving or storing in a self-storage facility,
you may want to check out this insurance.
"Getting the Money," by Jillian K. Beiberg, On Magazine. IndependenceFirst
How much can you afford?
Mortgage Calculators
Homeowner's Insurance
The lender is going to require some of the following insurance when you purchase a home.
If the lender requires the insurance, they will probably add this to your
monthly mortgage payment amount and hold the money in an escrow account. In the case of homeowner's insurance, you are responsible for
acquiring the policy, reviewing the policy for adequate coverage and paying for the policy,
although the lender may require you to pay the actual yearly payment from your escrow account.
The preceding guide has been derived from the
following sources:
"Going It Alone, Chapter 6 - Best Practices: Systematic and Strategic Approaches to Rental and Homeownership Opportunities
for People with Disabilities."
"Home of Your Own HomeChoice: Homeownership for people with disabilities," by the Missouri Planning Council.
"Homeownership and Section 8 Voucher" by Lee Schulz, Breaking Away, v. 22 #3, Fall 2001, IndependenceFirst.
"Hunt for
the Elusive Accessible Apartment" by Lori Hungate.
"Mortgage info just a click away," Milwaukee Journal Sentinel, Milwaukee, Wisconsin, Nov. 9, 1999.
"Owning A Home of Your Own, Expanding Our Thinking on Housing Choice" by Charlene Dwyer and Jerry Vogt, EBTIDE, Inc.
"Trusts and Home Ownership," Opening Doors, December issue,
1998.
"User Friendly,
Homes for the Disabled" by Broderick Perkins.
National Fair Housing
Advocate
U.S. Department of Housing and Urban
Development (HUD)
If you have questions or ideas, information and solutions that you would like to
share with us, contact us by e-mail at: horizons@new-horizons.org or to use
our NHU E-Mail Form or NHU Community Discussion Board, click the links below.
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