Can You Use Section 8 Housing Grants (Vouchers) to Buy a Home?

Assistance through vouchers

Section 8 housing assistance is provided through the use of vouchers. Many believe that these vouchers are exclusively for renters. They can be used by homeowners as well, although such vouchers are used less commonly. Your local Public Housing Authority (PHA) decides if it will be a participant in the Homeownership Voucher Program.

Assuming that you are already receiving rental assistance and your PHA authorizes the use of vouchers for homeownership, it may be a natural transition for you to purchase an affordable home. As long as the would-be homeowner is a first time buyer, they can qualify for Section 8 assistance to purchase a qualifying home.

Any funding a homebuyer receives through the Section 8 program is provided by the United States Department of Housing and Urban Development (HUD).



Determining eligibility

As you might suspect, HUD isn’t willing to hand out their funding unconditionally. In order to be eligible to receive assistance, a family (or household) must meet certain qualifications. To get assistance, a family must:

– Obtain a voucher from a PHA that participates in the Homeownership Program
– Be a “first-time buyer.” In some states a person can become a first-time buyer more than once if certain restrictions are met.
– Earn an employment income and meet any other work requirements
– Get approved for financing
– Attend homeowner programs as required by the PHA
– Attend homeowner counseling as required by the PHA
– Purchase a home approved by the program

If none of these present a significant obstacle to you, you could be a good candidate for the homeownership voucher program! Continue reading for more specific information about the requirements.

Qualifying finances

A qualifying homebuyer must work a full-time job or out-earn a full-time minimum wage worker. Because the federal minimum wage rests at $7.25, that means an applicant must gross more than $14,500 annually to qualify. Applicants may be eligible for reductions, if they are handicapped or elderly. (When calculating gross income, an applicant is not permitted to include any welfare, aid, or other public assistance.)

The last financial obstacle is the down payment. Only a 3% down payment is required, but 1% of it must come from the household’s own money. What that means for the homebuyer is that any gift or grant money cannot cover the entire down payment. If accumulating 1% of the purchase price for a down payment is not doable yet, you probably will not qualify.

Other requirements include that mandate that residents of the household must be able to afford both a) closing costs, and b) regular household expenses, including monthly bills. Public aid only goes so far. The legal fees associated with purchasing a home will not be covered and no additional aid will be provided for monthly expenses.

Employment requirements

Employment stipulations exist only for adults in the house, and a single adult can serve to meet all of the employment requirements for the entire household. Eligibility hinges on the presence of at least one adult working a regular, full-time job. A full-time job is one that reliably offers a minimum of thirty hours of work each week.

At least one adult in the household must also have a minimum of one year’s consecutive employment.

Can I purchase any type of home?

There are carefully crafted limits placed on the type of home you may purchase using Section 8 housing assistance. Primarily, these limits are imposed to prevent applicants from manipulating the system and obtaining heavily discounted properties which they can, in turn, use to make a profit.

For this reason, the only homes an applicant may purchase are single family homes (or single family units), and you must plan to live in the home you are purchasing.

Because HUD and your local PHA are committed to bringing quality housing to low-income families, they will not permit you purchase a home that falls below a particular mark on a standard inspection. They don’t want to use your money or their money to buy a subpar home. If the home you’re looking at simply doesn’t cut it, they won’t provide assistance.



Do I just get a lump sum?

Your Section 8 housing assistance will not be given to you in a single payment. In fact, you will likely receive many monthly payments over the course of up to 15 years, depending on the length of your mortgage’s term and other financial factors.

Some of the expenses for which you could receive assistance are:

– Principal and interest payments to your mortgage loan
– Annual real estate taxes
– Insurance (mortgage and/or homeowner’s)
– Regular expense credits (such as repairs or utility bills)
– Operating fees (such as those owed to a Homeowner’s Association)
– Loans for repairs and improvements

Homeowners are expected to contribute 30% of their monthly income to housing and housing expenses. If you are paying that much and not meeting the minimum, Section 8 housing assistance is likely to cover the difference.

Applying for the Section 8 homeownership program

Applying for Section 8 assistance as a homeowner is as simple as contacting your local PHA office. The number should be easily found online or in the phone book.  Once you’ve connected with them, accessing the forms necessary for application should be easy.