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Quit Renting Forever: Buy a House with Section 8 Vouchers Instead

Quit Renting Forever: Buy a House with Section 8 Vouchers Instead

Once you learn how to buy a house with Section 8 vouchers, you’ll never want to look for a rental again! Although most people think this program is only for renters, there’s actually a special provision that lets Section 8 participants purchase their own homes instead!

Isn’t that exciting?! I still remember how I squealed with excitement when I first found out about this program. My friend TJ had just stopped by after school, where he was studying to become a social worker. He had heard about the Section 8 Voucher Homeownership Program in class and couldn’t wait to tell me about it – and of course, I couldn’t wait to tell you as well.

That was clear back in 2017 and the program has definitely changed since then. That’s why I’ve just updated this post with fresh insights for 2024!

About the HCV Homeownership Program

The Housing Choice Voucher (HCV) Homeownership Program is an exciting addition to the Section 8 Housing Choice Voucher program. This loophole allows certain people who get Section 8 vouchers to buy their very own homes.

Just like the SNAP Restaurant Meals Program, the HCV Homeownership Program is established by federal law but it’s up to your local area to decide whether or not to implement it. As a result, this is a program that may be available in some areas but not others.

The good news is that almost every state has homeownership participants now. The bad news is that it isn’t simply a state issue. The decision is still left up to each individual Public Housing Authority (also called a PHA). There are more than 3,300 PHAs around the United States, which means this program can vary a lot between counties and even cities.

What does this program provide?

The HCV Homeownership Program provides a monthly payment that can cover a portion of your homeownership expenses.

Some of the expenses that this program can cover include:

  • Mortgage principal
  • Mortgage interest
  • Property taxes
  • Homeowners insurance
  • Major repair or replacement costs
  • Utility allowance
  • Land lease payments

You get a monthly assistance payment, known as the Housing Assistance Payment (HAP), to help cover your homeownership expenses. The amount of this payment is the lesser of two figures: either the standard payment set by the program or your actual monthly homeownership costs minus what you’re expected to pay (your Total Tenant Payment or TTP). The money can be sent either to you or your lender. If the amount they pay is more than you owe the lender, the extra money will be sent directly to you.

Do You Qualify?

You will need to meet specific requirements in order to buy a house with Section 8 vouchers. Not everyone who qualifies for a voucher will be able to use one to buy a home.

Generally, you will need to meet these guidelines in order to participate:

  • You must receive a Section 8 Housing Choice Voucher or be on the waiting list.
  • You must a first-time homeowner OR a member of the family must have a disability. As long as no household member has had ownership interest in a residence during the last three years, you are considered a first-time homeowner. If you have a family member who is disabled and needs special accommodations, you may be able to bypass this requirement.
  • You must meet a minimum income requirement. The income requirements are different depending on whether or not a family member has a disability.
    • If no family members have a disability, the family income must be equal to or more than the federal minimum hourly wage multiplied by 2,000 hours. In 2024, that’s $14,500 per year.
    • If the head of household or their spouse has a disability, the adults in your household must have a combined income that is not less than the SSI benefit for a single person multiplied by 12. In 2024, that’s $11,316 per year.
  • You must meet certain employment criteria UNLESS you are elderly or disabled. One or more adults must be employed full-time (at least 30 hours per week on average) and have been continuously employed for an entire year prior to the purchase of the home.
  • You must participate in home ownership counseling. The family must attend and participate in the PHA’s pre-assistance home ownership and housing counseling program.
  • You must meet other requirements as specified by your local PHA. For example, some locations may require you to use Section 8 vouchers on a rental for a certain period of time. Others may require you to be eligible to move without breaking your current lease. Different PHAs have different rules, so you will need to contact yours to find out what other requirements you may face.

The federal HUD office also allows PHAs to implement additional requirements. Depending on where you live, the local organization may have additional rules. For example, they may require that you be eligible to end your lease and move at the time that you buy a house with Section 8. They can also limit how many families can use their vouchers to buy a house with Section 8 or only accept families that have graduated from a Family Self-Sufficiency Program. It just depends on your local PHA’s rules.

Why buy a house with Section 8?

Buying a house with Section 8 vouchers offers several benefits for eligible individuals and families. It can be truly transformative. Here are a few ways that it can help:

  • Build Equity: Homeowners can build equity in their property over time, which helps create wealth and financial stability. This is an important benefit that is not available for renters.
  • Predictable Payments: Rent can increase over time but a fixed-rate mortgage will lock in your payments at a predictable rate. Property taxes, insurance and other costs can increase but your overall housing payment will be more stable.
  • Stability and Security: Many low income renters move frequently. Owning a home can provide a more stable and secure living situation by helping the family stay in one place long-term.
  • Freedom to Customize: Homeowners can do a lot more with their space than renters can. This can give families the ability to make a home tailored to their needs and preferences. This is especially beneficial for people with disabilities that require special accommodations.
  • Tax Benefits: Homeowners may be eligible for various tax deductions, such as mortgage interest and property tax deductions. These can help people save money and experience financial relief.

These are just a few of the reasons why low income people can benefit from learning how to buy a house with Section 8 vouchers. Of course, there are challenges, too. We’ll dive into those a little later in this post.

What if my area doesn’t offer this program?

Any PHA that offers Section 8 vouchers can choose to offer the Homeownership Program. There are participating PHAs in almost every state but many haven’t opted-in yet.

If your PHA doesn’t offer an HCV Homeownership Program at this time, you should reach out and encourage them to add it. Let them know that the HUD Field Office in their area can help them set it up.

How to Buy a House with Section 8 Vouchers

Now that we’ve addressed the basics, let’s dive into a step-by-step guide to help you buy a house with Section 8 vouchers!

Step 1: Verify Your Eligibility

Do not assume that you will be able to buy a house with Section 8, even if you are already receiving those vouchers. There are very specific rules and limitations on this program.

That’s why the first step needs to be communicating with your local Public Housing Authority (PHA). You can search online to see if they offer this program or contact them directly. Make sure to ask specifically about the HCV Homeownership Program.

While you’re talking them, make sure to ask if they have any special requirements that you need to meet. Find out what it takes to qualify for this program.

Step 2: Homeownership Counseling

In order to buy a house with Section 8 vouchers, you will be required to participate in a homeownership counseling program. Not just any program, either. It has to be a special program offered by a HUD certified housing counselor.

Before you jump in and enroll in a homeownership counseling course, be sure to check with the PHA. They can point you in the right direction to find a certified program in your area.

Step 3: Apply for a Loan

Once the PHA gives you the green light to move ahead, you need to contact a participating lender to apply for a loan. You can use any lender that will work with you, but the PHA should be able to make it easier by giving you a list of lenders that cooperate with the program.

It can be hard to buy a house, with or without Section 8 vouchers. You need to meet income and credit requirements. Lenders often have strict guidelines about who can qualify for loans. Once you go through the prequalification process with your chosen lender, you’ll have a better idea of how much you can afford.

If you need help improving your credit to qualify, don’t despair. I have bought two houses in my lifetime and both times, I had to frantically clean up my credit in the months leading up to the purchase. It’s not uncommon. There are some strategies that can help. Here are five credit hacks that I used to go from homeless to homeowner in just 18 months!

Step 3: Find the Right Home

Remember how hard it is to find a landlord that accepts vouchers because of all the extra hoops? Unfortunately, you’ll encounter some of those again when you try to buy a house with Section 8 too because this program also has some special requirements.

Your home must meet some specific guidelines. For example:

  • Your family must occupy the entire home.
  • The home must pass two home inspections: a professional home inspection and a special inspection conducted by the PHA’s inspector.
  • The home must be within the area that is covered by the Public Housing Authority issuing your voucher. In some cases, you may be able to use the portability clause to purchase a home in an area where a different PHA has a HCV Homeownership Program but that gets complicated quickly.

That means that you can usually buy a single family home or mobile home that is permanently installed on land that will be included in the purchase. You can also buy a single unit in a condominium or cooperative. However, you cannot buy a property that includes other homes or commercial space that the family won’t occupy.

Your family will be able to continue receiving rental assistance while you look for a home to buy with Section 8. The HUD office gives each PHA the ability to set time limits on how long families have to find a home that qualifies. If your search takes too long, your HCV participation may be returned to the wait list or offered rental vouchers instead.

Step 4: Make an Offer

When you find the right home, you will make an offer. The offer is a legal contract that will include specific details about the home and the purchase process.

HUD requires all HCV Homeownership Program contracts to include the following:

  • Price and other terms of the purchase
  • Provision for pre-purchase inspections
  • Provision that releases the buyer from the obligation if the house doesn’t pass the inspections
  • Provision that states the buyer isn’t obligated to pay for any needed repairs
  • Certification that the seller hasn’t been debarred, suspended or subject to LDP under HUD rules.

Usually, the PHA will give you an addendum to include in the sales contract that will cover these things. This addendum may also include other things as well.

Once you complete the sales contract, you will need to submit a copy of that document to the PHA. You’ll also need to work with your lender to finalize the financing of your home.

Step 5: Complete the Buying Process

Once the seller accepts your offer, the process to finalize the sale begins. It can take a while because there are many steps that need to be completed. When I bought my home, it took 45-60 days to close.

During this time, the lender and PHA will take steps to make sure that the home meets their requirements and verify your eligibility. Some of the things that will take place during this time include:

  • Home Inspection: A professional inspector will examine the property to identify any issues with the structure, systems, or components of the house. This is important because it helps you understand any maintenance or repairs that need to be completed. You are usually expected to pay for this.
  • PHA Inspection: When you buy a house with Section 8, there’s a second inspection that is completed by the PHA. This inspection is designed to ensure the property meets the Housing Quality Standards (HQS) of the Section 8 program.
  • Appraisal: An appraisal will be conducted to determine the market value of the home. Lenders require appraisals to make sure that the property is worth the amount of money they are loaning you.
  • Title Search and Insurance: A title search will be conducted to ensure there are no liens, disputes, or legal issues with the property. Title insurance is purchased to protect against future claims.
  • Loan Finalization: You don’t officially apply for the mortgage until you complete the offer. During this time, your lender will work on your loan application to make sure you meet all the requirements.
  • Final Walk-Through: Just before closing, a final walk-through of the property is usually conducted to ensure that the condition of the home hasn’t changed and any agreed-upon repairs have been made.
  • Closing: At the closing meeting, you’ll sign all the necessary paperwork to complete the purchase, including mortgage documents, and you’ll officially become the homeowner.

I know this sounds overwhelming, but your lender and PHA will be able to keep you informed throughout this process so you always know what’s happening.

Step 7: Ongoing Steps

The process doesn’t end there! When you buy a house with Section 8, there are some extra steps you need to continue taking to ensure that your financial support continues.

For example, you will need to go through regular reexaminations with the PHA to recalculate the amount of financial support you receive. In HUD’s written guidance, they promise that the payment standard will never drop below the initial amount that was promised when you started getting those benefits. However, they may pay more if your family size increases or if other changes happen.

You are also required to notify the PHA if you move out, default on the mortgage, or experience a change in your homeownership expenses. Additional terms may apply, as determined by your local PHA.

FAQ about Buying a House with Section 8 Vouchers

We get a lot of questions about this program. Here are some of the most common ones.

How long can I get help?

The HCV Homeownership Program can pay a certain amount toward your mortgage for a certain period of time. If your mortgage term is 20 years or longer, you could receive assistance for up to 15 years. If your term is shorter than 20 years, you can get help for up to 10 years.

The term limits do not apply to homeowners who are elderly at the time of purchase or who qualify as disabled while receiving assistance. If your household no longer qualifies as elderly or disabled, then the term limits will go back into effect and be effective as of the start of your assistance.

Where can I get more info?

Most of the information in this article was found in the HUD Housing Choice Voucher Homeownership Guidebook. It’s a long read (over 80 pages) and written for PHAs, so we simplified the information here for prospective buyers. You can read it online if you’d like more information.

Relief Recap

You may be able to buy a home through the Section 8 HCV Homeownership Program! This is a great way to build equity instead of throwing money at rent every month. This program is administered by local PHAs, so you will need to contact your nearest Public Housing Authority to apply.

Nicole is the founder and lead researcher of Low Income Relief. After a personal experience with poverty and homelessness following her husband's sudden medical discharge from the U.S. Army, Nicole discovered the life-changing impact of community resources. This experience ignited her passion for empowering others to navigate similar crises. Nicole launched her writing career at age 16, working for various newspapers and publications. Her commitment to in-depth research and accessible content has been recognized by Google for Publishers and other industry leaders. For over 20 years, she has applied her investigative skills to uncover the most helpful, up-to-date information on benefits programs and community resources, ensuring Low Income Relief maintains the most extensive resource databases available.