What’s Section 8 Housing, And Can Its Homeownership Program Help You Buy A Home?

If you’re on the hunt for a Section 8 Housing Choice Voucher, you’ve come to the right place. You may think of Section 8 housing programs in terms of rental assistance, but the Section 8 Homeownership Program can help you buy a home − and help you start building equity in a house over time.

Here we’ll take a closer look at how this solution can help you purchase a new residence, as well as the requirements for qualification.

What Is Section 8 Housing? 

Section 8 housing exists to help ensure that low-income, disabled and elderly individuals can find safe places to live outside of public housing options. In effect, the Section 8 program makes it possible for landlords to rent homes and apartments to qualified low-income tenants at fair market rates.

Under the terms of the Section 8 program, officially known as the Housing Choice Voucher Program, qualified individuals can obtain a voucher and subsidy that helps low-income families lower the cost of their rent. While the U.S. Department of Housing and Urban Development (HUD) oversees and funds the program, vouchers are administered by local public housing agencies (PHAs).

Should your family qualify for a Section 8 home, HUD will provide one of a limited supply of vouchers (a subsidy of sorts) to help you secure a rental unit outside of public housing.

Once a residence has been located and approved, HUD will send rental payments directly to the landlord. In some cases, for Section 8 participants, the voucher will cover the entire cost of the rent. In others, it may require the household to pay around 30% of their income toward rental costs.

How Does The Section 8 Housing Choice Voucher (HCV) Homeownership Program Work?

Since 2000, HUD has also allowed Section 8 tenants to pursue the dream of homeownership by utilizing their vouchers toward the purchase of a home. This is because the government created the program to help provide a chance for low-income families to own their own residence.

This means families can leverage these funds as a method to build equity in a property. Instead of passing along their funds to a landlord, this program allows families that meet the requirements for Section 8 assistance to invest in their future through homeownership.

Pros Of The Section 8 Homeownership Voucher Program

There are many upsides to be enjoyed by participating in the Section 8 HCV program.

• It enables low-income families to build equity in a property, enjoy the pleasures of homeownership and improve their standard of living.

• Applicants may find that they’re able to secure a better and safer home in a better-situated neighborhood by making the jump from renting to purchasing and owning a home.

• You’ll be able to call on the expertise, advice and support of your local PHA (or a local nonprofit) as you shop for and manage the process of purchasing a home.

• Applicants will participate in educational programs preparing them for homeownership.

Cons Of The Section 8 Homeownership Voucher Program

Of course, there are also some disadvantages of the program to consider.

• A Section 8 voucher won’t always provide enough financial support for low-income families that want to own a home in a more expensive area.

• Voucher support may not be permanent, and can come with term limits. If your loan term is longer than the support term, you’ll have to cover the full cost of the loan once your voucher term runs out.

• Many lenders prefer not to provide financing for PHA homeownership programs, making it more difficult to find a potential lending partner.

• Getting a voucher can take years in some cases to complete. By then you may already have found other options.

What Are The Section 8 Eligibility Requirements?

As your local PHA administers Section 8 vouchers, you’ll need to work with them to get a better sense of your Section 8 eligibility. Here’s a few general qualifications to expect.

Income Qualifications

As a rule of thumb, your family may find yourselves eligible for Section 8 assistance if your income sits below 50% of the median income for your local area. Additionally, adults in the family must be employed for an average of 30 hours per week and have been employed for the past year.

Note that in the case of elderly or disabled individuals, it may be possible to qualify for exceptions to these requirements. However, at the same time, most families will need to contribute an average of 30% — 40% of their income to cover rent, even with the help of a voucher.

Citizenship Eligibility

The Section 8 housing program and related vouches are available to U.S. citizens only. (Although some non-citizens with eligible immigration status may also qualify.) For more on eligibility requirements, you can visit HUD’s information page.

Criminal Record Disqualifications

In addition, you’ll have to undergo a criminal background check when you apply for a housing voucher − and having a criminal record could disqualify your eligibly. If you have concerns, check with your local PHA, who may reserve the right to deny your application based on previous criminal convictions.

Eviction History Disqualifications

Local PHAs can also disqualify applicants if they’ve previously been evicted from public housing.

As you might imagine, the first step in the process of applying for the program is to find out if you qualify for Section 8 assistance.

How Do You Apply For Section 8 Assistance?

The Section 8 application process can be long and involved, but generally operates according to the following steps. 

Step 1: Contact Your Local Housing Authority

You can find PHA contact information for your local housing authority at HUD’s website. Contact them to get the process started.

Step 2: Verify Your Eligibility

Next, you’ll work with your local PHA to determine whether you qualify for Section 8 housing. Note that the PHA will sometimes show preferential treatment to local applicants and those dealing with homelessness.

Step 3: Complete the Application

Finally, you’ll fill out the PHA’s application if you qualify for Section 8 housing, which can be obtained by contacting your respective housing authority. You’ll need to provide some personal information, including your name, address, employer, various financial details and more.

Can You Buy A House If You Qualify For A Section 8 Housing Choice Voucher?

Having received a housing voucher, you can begin looking for affordable housing, so long as you’re approved by the local PHA to purchase a home. The PHA requires you to go through a process where it considers your ability to steadily make mortgage payments.

If you are approved, you will also have to undergo financial counseling to improve your knowledge of household budgeting and the importance of credit. After completing this process, you’ll be set to take your dream of homeownership to the next level and can actively begin to look for houses.

Housing Qualify Requirements

Any home that you choose must meet HUD’s Housing Quality Standards (HQS). Specific requirements include, but are not limited to:

• Cleanliness
• Functional kitchen
• Sanitary bathrooms
• Condition of structure and windows
• Presence of lead-based paint

The Bottom Line

Section 8 housing help low-income, disabled and elderly individuals find safe housing. Noting this, the Section 8 homeownership program could be a good opportunity for those potential home buyers who qualify.

However, if you’re looking to purchase your first home sooner rather than later, other first-time home buyer programs may work better for you. Read this guide on first-time home buyer programs, loans and grants to see what other assistance programs you may qualify for.