Lower Income Home Options Explained

Low Income Housing Choices

Are you looking for low priced housing options due to having a smaller income?

With home prices having skyrocketed across the country over the last few years it has been harder than ever to find affordable housing.

It has been a crazy seller’s market characterized by bidding wars with many homes selling over the asking price.

It hasn’t been the kind of market that has been kind to those looking at housing for low income. There is the chance that things could be shifting a bit in some markets across the country.

It raises the possibility to find some housing options that won’t be priced out of your budget.

Let’s look at three types of homes that offer the opportunity to start building equity.

What Are Some Lower Income Housing Choices?

Shipping Container Homes Are Less Expensive

A shipping container home is a less expensive option for homeowners looking to purchase a home. These homes are made from recycled shipping containers and are typically assembled on-site. They can be customized to meet the needs of the homeowner, including size, shape and color.

The benefits of shipping container homes include their low price tag, quick and easy assembly, weatherproofing and durability. They can also be used as second homes. In addition, shipping container homes are environmentally friendly because they produce little waste.

Shipping container homes are priced far more favorably when compared to traditional housing choices. The trick is finding somewhere that is acceptable. Not every city of town will allow shipping container housing.

You will need to speak to the local building department to find out if they are allowed. There is also the challenge of finding a low cost piece of land if there are not resales available.

Tiny Homes Are All The Rage Due to Affordability

Tiny homes have grown tremendously due to their affordability. The average tiny home is about 220 square feet, which is a fraction of the size of an average home.

Tiny homes are popular in areas that have a shortage of affordable housing options, such as California and Hawaii. There are many reasons why tiny homes are becoming more and more popular.

One reason is that they can be easily moved if you need to find a new job or if your current job changes location. They also take up less space than traditional homes, which makes them perfect for small spaces like apartments or condominiums.

Tiny home experts generally agree that a house can be classified as “tiny” if it is less than 500 square feet and is free-standing.

One of the best perks of owning a tiny house is the affordability factor. Your mortgage loan is likely to be much smaller with this type of housing choice.

Small houses generally mean far more breathing room when it comes to a house loan.

The task at hand here will again be finding either a cheap piece of land to build on or finding a resale home that suits your needs.

As you might imagine, when you are talking about square footage this small it is harder to be as imaginative with home designs.

Modular Homes Are Moderately Less Expensive

Modular homes are moderately less expensive than traditional stick-built homes. While the cost will depend largely on the design and amenities, you can expect the price to be lower.

A modular design that is small in size can cost around seventy five to eighty thousand dollars.

The two main modular home price points you need to be aware of are the factory Direct and Indirect prices.

Factory Direct prices refer to homes that are built from the ground up by a modular manufacturer, and they tend to be more expensive than Indirect prices.

Indirect prices involve buying a pre-made home from a third party, and they can be cheaper than Factory Direct prices depending on the model you choose.

  • The base model cost of the product includes the delivery, assembly, and modular sections.
  • The finished cost of building a home includes all the necessary costs, such as building foundations, connecting utilities, and landscaping.

Since you need foundations and utilities, and building the home without permits isn’t going to go well, it’s important to consider the finished cost.

Modular homes are an excellent option for those who are looking to save money on their home building project.

Average base model costs are about $120,000-$150,000. The finishing costs can bring the total cost up to around $270,000-$300,000.

The base price for a new home will be significantly different than the overall cost after extras are included.

Additionally, modular homes can be built in a month or so, compared to the average of around six months for traditional homes.

Mobile Homes Offer Cheaper Pricing

There are a number of reasons why mobile homes might be cheaper than other housing options. One reason is that a mobile home typically doesn’t require as much maintenance as other types of housing.

Another reason is that mobile homes are often located in rural areas or areas with low population density, which means they’re less likely to be crowded or have high prices.

In addition, mobile homes can often be purchased outright, rather than being leased, which can reduce the cost of the overall purchase.

Mobile homes are also one of the cheaper forms of housing construction.

Some folks may not be able to get past the stigma that comes with mobile homes being a less desirable housing choice but they do work well for those who have lower incomes.

Get a Lower Income Mortgage

When you have a lower income or don’t have the best credit scores there are some mortgage options you’ll want to look into.

Some of the most popular mortgage loan programs for low income borrowers include:

  • FHA loans
  • VA Loans
  • USDA Loans
  • Good Neighbor Next Door
  • Homeready from Fannie Mae
  • Home Possible Advantage from Freddie Mac

These mortgage programs have some of the more relaxed loan restrictions.

You should always consult with a lender before applying for a lower income mortgage, as some lenders only offer these types of loans in select areas.

Getting with an excellent mortgage broker is always worthwhile to give you your best financing options.

Final Thoughts

Finding an affordable home isn’t always easy but these four housing styles give you the best chance to find something reasonably priced.

Best of luck finding that property that fits your needs and budget.

About Bill Gassett

Bill Gassett is a thirty-two year veteran to the real estate industry. He enjoys writing helpful articles for buyers, sellers and fellow real estate agents to make sound decisions. His work has been featured on RIS Media, National Association of Realtors, Inman News, Placester, RESAAS, Credit Sesame and here at Realty Biz News. He was the #1 RE/MAX agent in Massachusetts for 2018.

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