Refinance & Mortgage Guide for People with Disabilities

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This guide seeks not only to provide the reader with the most relevant and essential resources needed to navigate the myriad of red tape and sometimes rigid processes regularly associated with real estate purchases; it also aims to educate you.

To summarize, by the end of this guide you should have a basic understanding of the following:

• The advantages and disadvantages of purchasing a home
• Keys steps to follow in the buying process
• The types of mortgages available to you as a home buyer
• Financial and Legal resources available to you
• Final tips & Warnings

Many people with disabilities agree that one way of taking charge and exercising some degree of control in their lives is by becoming a home owner. If you are currently a home owner who has recently been disabled, you may have new physical, mental and financial restrictions and needs which affect or even threaten your ongoing ability to maintain your home. Results of recent studies also reveal that only a small segment of the disabled populace own their own residences. Instead, the majority of the nation’s disabled live in group residences, therapeutic or rehabilitation institutions, nursing facility complexes, or in the home of a family member. A small percentage of children with disabilities live in adoptive or foster homes; and some communities, churches, civic groups and charitable organizations are now promoting programs which encourage families to sponsor a senior citizen, adolescent or child who is mentally challenged or physically impaired.

However, many psychologists, M.D.s and other medical staff members, social workers and community leaders agree that for the majority of disabled adults, some level of independent living is highly beneficial both to their emotional well-being and to their development of self-reliance and confidence. Of course, as home owners, they can ideally have and maintain such levels of control and responsibility in their lives, thus enhancing their feelings of self-worth and independence.

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Chapter 1 – Historical Overview

As a disabled person in the United States, whether you live in a public housing facility or a private residence, Federal laws protect you from discrimination due to your disability. Not only must all residential property owners and realtors abide by legal requirements for handicapped accessibility and usage of rental apartments and houses for sale in the present day real estate market, but they must also abide by laws prohibiting discrimination against interested potential buyers and renters with disabilities.

Another very important aspect of Federal legislation protecting the disabled is that the term “disability” has been clearly defined. By definition, a disabled individual is someone with a mental or physical limitation that causes definite and lasting impairment of at least one major life activity. Generally included impairments or handicaps are loss of hearing, mobility and sight, as well as such chronic conditions as alcoholism, drug addiction, mental illness and retardation, AIDS and AIDS related illnesses and medical conditions. The basic life activities and functions referred to are breathing, hearing, seeing, walking, talking, performing simple tasks, elementary learning and self-care. Aside from being quite helpful when applying for home healthcare services, disability insurance compensation, and various types of funding, a generally accepted definition of the term is a great aid in acquiring a good mortgage when a disabled person makes the decision to get onto the property ladder.

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Chapter 2 – Pros and Cons of a Disabled Person Acquiring a Mortgage

There are both advantages and disadvantages associated with successfully obtaining a mortgage and purchasing a home, as a disabled person.

• If you are presently receiving therapy or rehabilitation treatments at a medical or community facility, you may now choose to have these treatments provided in your new private residence by home healthcare workers. Or, if continuing to receive treatment at an ambulatory facility is best for you, you can now arrange transportation to and from that facility and your home, usually funded by your medical disability insurance.

• Homeownership comes with an immense sense of freedom and independence. As a home owner, you are free to install ramps, handlebars, beds and baths for the handicapped throughout your home, as needed. You can structure your time as you like, leading a more relaxed life than is often possible in a nursing facility or group residence.

• However, as a new home owner with one or more personal handicaps or impairments, getting the lay of your local vicinity will help the bedding in period of a new home. For instance, you will need to familiarize yourself with services and amenities readily available in your neighborhood and surrounding community. Is public and/or private transportation also available and easy to access? Do stores, shops, pharmacies and service businesses provide delivery of food, clothing, medicines, household and appliance maintenance supplies when requested? Are there smooth sidewalks and easy walking areas without steps in public areas near your house? Is wheelchair access commonly available, if needed, in buildings you will need to enter and exit? Such issues with immediate relevance and importance, as well as financial questions, can often be discussed and resolved well ahead of your move to your new home, by consulting a professional, experienced housing counselor.

• The primary financial concerns you will now face as a disabled home owner can seem somewhat overwhelming if you are confronting them alone. Yet, with the expert advice of a knowledgeable housing counselor, many potential problems can be avoided completely or dealt with quickly and efficiently.

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Chapter 3 – Getting Started in the Home Purchasing Process

Once you’ve decided you would like to become a homeowner you will need to adhere to the following steps:

At the Bank: Together with your housing counselor should contact your bank to apply for a mortgage loan. The bank will then evaluate your overall financial status by checking your annual income, yearly expenses, outstanding debts and credit history. Since you are disabled, your income and other financial data may differ substantially from those of other people in your age group who are not disabled. Your housing counselor can be helpful in outlining your special needs and limitations which affect certain figures in your financial profile. If this is your first mortgage application, your counselor and bank loan officer can also assist in your full understanding of loan down payments, mortgage rates (or interest rates), monthly principal payments and additional ongoing costs. Your counselor can also help you find other suitable financial aid programs to supplement and enhance your overall financial situation. (Some of the best informed housing counselors are obtainable through HUD, the Department of Housing and Urban Development.)

Outline your needs: Next, you, your counselor, and perhaps your M.D., a nurse or home care worker who fully understands your disability, should make a complete listing of your special needs in order to determine what home type and interior design will best meet your daily requirements. If you get pre-qualified for a mortgage loan, this will enable you to ascertain a realistic estimate of how much you can reasonably afford to spend on a house along with any necessary accessories and remodeling. And, above all else, be aware that some mortgage loan representatives and even bank loan officers may not offer you a full range of mortgage opportunities simply because of your type of disability.

Since 1990, there have been some remarkable milestones in raising the number of national home owners among minorities and the disabled:

|— In 1990, the Low Income Housing Preservation and Resident Homeownership Act was passed, preserving and rehabilitating low and moderate income housing, which benefited many disabled home seekers.

|— In 1993, President Clinton increased available financing for housing by means of an Interagency Policy Statement on Credit Availability.

|— In 1994, Fannie Mae made a $1 trillion commitment to increase targeted mortgage loans to minorities and people with disabilities.

|— In 1999, NAHB, HUD and the nation’s city mayors joined forces and interests to build new homes in both inner city neighborhoods and older suburban areas, making more homes available for lower income families, minorities and home seekers with disabilities.

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Chapter 4 – Types of Mortgage Loans Available

Beginning as a government agency in 1938, Fannie Mae became a private company owned by shareholders in 1968. It offers numerous mortgage products and programs which provide equal opportunities for becoming home owners to people with disabilities or handicapped family members. Programs currently in operation include:

• Community HomeChoice – for the disabled at low to moderate income levels. It provides for flexibility of Loan-to-Value ratios (LTVs), down payment sources, qualifying ratios, and credit establishment.

• Community Living – a lending product structured to offer financing for small, group homes for children and adults who are disabled and cannot live independently. These mortgage loans are different from more traditional mortgage designs since borrowers are not necessarily individuals. Also eligible as applicants are non-profit and profit seeking corporations, limited partnerships, and government agencies aiding both children and adults who are disabled.

• Community Landing – varied mortgage programs, often with low or no down payment requirements designed specifically to benefit disabled applicants by helping them conquer the two most common obstacles to owning a home: down payment funds and qualifying income. These mortgage products usually have lower closing costs and a higher debt allowance than most traditional mortgages.

The Most Popular Mortgage Types

Fixed Rate Mortgages – This variety of mortgage loan (often referred to as “the granddad of all mortgages”) is now offered as 10-year, 15-year, 20-year, 30-year, 40-year, and 50-year fixed-rate mortgage loans, and all are completely amortized.

FHA Loans – FHA mortgages are government insured and come with the lowest possible payment requirements.

VA Loans – Veterans Administration loans are provided for veterans of the U.S. Armed Services. These loans are government guaranteed, and the borrower is not required to make a down payment.

Interest-Only Mortgages – These loans include an option to render an interest-only payment.

Hybrid Varieties of Mortgages

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