When Tiffany East and her boys, Adam and Jake, moved out of their home after Tiffany and their father divorced in 2003, they lived with her mother for a few months. “I remember it feeling so temporary as we were using her furniture and everything that was theirs was still at their dad’s,” she shares. “They asked when we were going to get our own place and that’s when I knew it was important for them to have their own space, with their own things. Someplace where we could all put down roots.”
Tiffany purchased what she calls her “freedom house” in 2004 and she says the freedom it gave her was more than just financial. “Owning a house gave me the value and worth I was looking for after my divorce,” she says. “And it gave us all stability. Once we were in our own house, my boys had their own space that they knew they could paint and decorate however they wanted.”
When recovering from the pain (and possible financial setback) of a divorce, the last thing you might want to think about is buying a new home. However, there are plenty of reasons why the timing may make sense, particularly if you had to sell a house because of the divorce.
- Investment: Nevada is facing a major housing shortage, which can make buying a house more expensive. But it could also mean that your investment in a new home could make you more money down the line.
- Renting: Because of said housing shortage, rents are going up across the state, making it even more difficult to find something to rent that meets your standards and is affordable.
- Taxes: While we’re on the topic of money, consider taxes. If you’ve made money on a house sale (perhaps one precipitated by a divorce) and you don’t reinvest in a new home, you may end up owing taxes on the profit. You’ll want to talk to your accountant about the details of your specific situation.
- Security: Perhaps most importantly, owning your own home can provide you and your family with stability, as it did for Tiffany and her sons. It also provides the emotional security of having a place to call home and knowing a landlord can’t raise the rent or evict you.
Of course, buying a house is easier said than done, especially when it comes to the money necessary for the purchase. Many families can afford the monthly mortgage payment (and may already be paying the equivalent in rent), but struggle to come up with the down payment and closing costs. Don’t despair, there are a whole lot of resources available just for folks like you.
Single parents qualify for more programs
Most housing programs consider household income, which means that as a single income family, you’re more likely to qualify for assistance. For example, the Nevada Housing Division (NHD) Home Is Possible down payment assistance program is available for households with a maximum qualified income of $70,100 to $87,700, depending on which Nevada county you live in.
There are other programs specifically designed for single parents, including those offered by Habitat for Humanity and the Department of Housing and Urban Development (HUD).
Advantages of being a first-time buyer
There are also special homebuying programs for first-time buyers which, contrary to their name, do not require that you have never owned a home to qualify. You just can’t have owned one in the last three years.
NHD’s Home Is Possible for First-Time Homebuyers program offers down payment assistance up to 4% of the loan amount, along with an attractive 30-year fixed interest rate. It’s definitely worth checking out if you’re ready to step into the housing market for the first time. Or the first time in a while.
The Federal Housing Authority also offers FHA home loans to first-time buyers. It requires a 3.5% down payment and doesn’t have income-eligibility requirements. Minimum credit scores of 580 are required for a 96.5% loan and 500 for a 90% loan.
Having said that, you don’t have to be a first-time buyer to qualify for all programs. In addition to the general Home Is Possible program mentioned above, NHD has special offers for veterans and teachers.
A few other things to consider
If you don’t have a partner to handle your affairs in the event of your death, it’s especially important to consider life insurance to help ensure your children don’t lose their home if something happens to you. Depending on their age(s), you’ll need to appoint a beneficiary to manage the property until the children turn 18.
Another option is to work with an attorney to set up a trust for the benefit of the children and name the trust as the beneficiary. When creating the trust, you spell out the rules for how the money should be used and name a trustee to manage the money according to the trust directions.
You’ll want to talk to a professional to discuss both of these options.
When single becomes double
Owning your own home while single can also be a huge benefit if you decide to marry again. When Tiffany met her current husband, John, they both owned houses.
“When we decided to buy our together home, I didn’t have a lot of savings,” she says. “But I did have a house I could sell so I felt like an equal when we started our new life together.”
If you’re ready to buy a new home for your family, the first step is to find a HIP-qualified lender who can discuss your options with you, and let you know how much house you can afford.