Pay Your Mortgage with the Homeownership Voucher Program

If you're looking to buy your first home but need help paying the mortgage or covering other related homeownership expenses, the Homeownership Voucher Program (HVP) can help.

About the Program

The HVP grants subsidies through the Housing Choice Voucher Program (HCVP). If you're already receiving HCVP assistance, you may be able to apply your benefits toward a mortgage. In other words, families receiving Section 8 funds can decide if they want to apply their vouchers toward rent or a mortgage. However, not all PHAs participate in the HVP. And if you're not already receiving HCVP assistance, you will need to qualify through your local Public Housing Authority (PHA).

To see whether your local PHA will allow you to apply rental assistance toward a mortgage, check here.

Qualifying for Assistance

There are several factors that your PHA will consider when determining your eligibility. If you or a family member has a disability, the PHA will give priority to helping you, but your income must not exceed the established income limits.

PHAs follow federal guidelines when determining subsidy payments. Generally this will amount to 30% of your household income. Sometimes the PHA will require that the home not exceed a certain value, to ensure that you don't overextend yourself. At the discretion of the PHA, financial assistance may either be paid directly to you or to the mortgage lender, and is paid monthly. The details of subsidy payments are handled by your local PHA after (and only if) you are approved for assistance.

To benefit from the HVP, most PHAs will require that your home be within their jurisdiction, though some PHAs will make exceptions to this rule depending on your circumstances.

If approved for assistance, each year you will need to show that your income has not increased beyond eligibility limits. You can receive assistance for a maximum of 15 years, unless there are elderly or disabled persons in your household.

In a nutshell, in order to qualify for HVP assistance, families:

  • must have a Section 8 voucher from a Public Housing Agency (PHA) that takes part in the Homeownership Program
  • must be a first-time homebuyer
  • must attend a homeownership counseling program approved by their PHA
  • must obtain their own financing, subject to the approval of their PHA
  • must attend any post-purchase homeownership programs required by their PHA
  • must meet the financial requirements
  • must meet the work requirements
  • must buy a home that meets the program standards

Find a Quality Home

To qualify for assistance, the home must be a single-family home or a single unit in a condominium or cooperative and one you plan to live in. Your home will need to pass an inspection initiated by your local PHA to ensure certain standards of safety and quality are met. Additionally, you'll need to have an independent inspection. You can hire a certified inspector for anywhere from $200 to $500 generally.

The Benefits

Your Public Housing Agency will make a monthly homeownership assistance payment on your behalf for up to 15 years if the term of your mortgage is 20 years or more. Otherwise the limit is 10 years. However, there is no time limit for elderly or disabled families. Also, your PHA may pay your mortgage lender directly, or may give the payment to you.

The HVP vouchers can be used for:

  • mortgage principal and interest
  • mortgage insurance
  • real estate taxes
  • homeowner's insurance
  • utility allowance
  • allowance for maintenance and repairs
  • loans for major home repairs
  • loans to make the house accessible for family members with disabilities
  • condo or coop monthly maintenance and operating fees
  • If your total homeownership expenses are less than or equal to the payment standard in your community, you will pay 30% of your adjusted monthly income toward your expenses and Section 8 will pay the rest.

Other Requirements

To be approved for HVP assistance, you must be able to pay closing costs, including lawyer's fees and other costs that might be associated with closing. You also must be able to pay a share of homeownership expenses (minus Section 8 assistance) as well as other monthly expenses. Your local housing agency will review your homeownership expenses as well as your family's other expenses and decide if the house is affordable for you.

You also must meet the following work requirements:

  • At least one adult in the family must be working full-time (a minimum of 30 hours per week).
  • At least one adult in the family must have been employed continuously during the year before receiving Section 8 homeownership assistance.

If you follow these guidelines and work closely with your PHA, you can own a decent, affordable home that can be a comfort for years to come.

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