Finding and keeping a place to live is a basic need and one of the first things you might start to worry about when you run into problems with your income. Whether it's a disability, loss of a job or reduced hours at work, a low income can make it difficult even to supply your family with the basics. But there is help for homeowners and renters with low incomes.
Rent Control
Rent control helps home renters who qualify under state or city guidelines. In a municipality that enforces rent control, landlords can only raise monthly rent by a given percentage each year. Rent control laws also limit other fees landlords can charge, making it easier for renters with low incomes to retain their housing. Although rent control sometimes excludes single-family homes, it applies to multi-family homes and larger rental units that serve as homes for many urban residents with limited incomes.
Refinancing
Homeowners whose income falls below the threshold that allows them to meet a monthly mortgage payment can get help by refinancing. Because mortgage obligations don't change as a result of a drop in income, refinancing seeks to get a lower monthly payment by getting an entirely new loan to pay off an existing mortgage, The new loan may have a lower interest rate or a longer term that allows the homeowner to pay it off at a slower rate but within a more limited household budget. Mortgage lenders offer refinancing and the federal government insures some loans for eligible homeowners who face foreclosure but can't get refinancing through traditional means.
Public Housing
Public housing is an alternative available to some of the lowest-earning citizens. Public housing, which is administered by the Department of Housing and Urban Development through each state, consists of publicly owned subsidized housing in multi-unit buildings and voucher programs that allow renters to get reduced rates in privately owned rental housing. In both cases the state and federal government contribute to the cost of housing to keep the price to the tenant affordable.
Mortgage Modification
As an alternative to refinancing, homeowners with reduced incomes can seek mortgage modification. Instead of replacing a mortgage with a new loan, modification changes the terms of the existing loan if the lender is willing. Lenders can offer temporary stoppages of payment, extended payoff terms or lower interest rates to keep homeowners in their homes and paying their bills regularly. If mortgage modification fails, homeowners may need to seek help by filing for bankruptcy, which can discharge debt and result in a court-ordered plan for paying a mortgage based on what little income the homeowner has.
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