Housing Choice Voucher Homeownership Program
Any Housing Choice Voucher eligible applicant or program participant who has been issued a Housing Choice Voucher may utilize the subsidy to purchase rather than rent a one, subject to the following:
A family must meet the requirements for admission to or continued participation in the GDPM tenant-based program.
The head of household or co-head that has previously defaulted on a mortgage obtained through the homeownership option is barred from participation.
Participant families must be "first-time" homeowners, where a family member must not have owned title to a principal residence in the last three years. Residents of limited equity cooperatives are eligible for the homeownership option. (Title to a mobile home is not considered as homeownership for purposes of this option).
Participants in the Housing Choice Voucher homeownership option must enroll in a GDPM approved pre and post-purchase homeownership training and counseling service and be deemed to be "mortgage ready" before the housing choice voucher can be utilized toward homeownership. At a minimum, the homeownership training will cover the following:
- Home maintenance
- Budgeting and money management
- Credit counseling
- Negotiating the purchase price
- Financing/refinancing/predatory lending practices
- Locating the home
- Deconcentration issues
- Family must purchase only a home that passes HQS inspection
The head of household or co-head must be employed full time and have been continuously so employed during the year before commencement of homeownership assistance. Families in which the head of household or co-head are disabled or elderly are exempted from this requirement. Families with a disabled household member may request an exemption as a reasonable accommodation.
The family's income must be equal to or exceed two times the payment standard for the family's unit size. Public assistance income may not be used for meeting this requirement except for households in which the head or co-head are elderly or disabled and households that include a disabled person other than head or co-head. Public Assistance includes federal housing assistance or the housing component of a welfare grant: OWF assistance, SSO that is subject to an income eligibility test; food stamps; general assistance or other assistance provided under a Federal, state or local program that provides assistance available to meeting family living or housing expenses.
Applicants must enroll in the Housing Choice Voucher Family Self-Sufficiency Program. Applicants for the homeownership option must be a Housing Choice Voucher tenant for a minimum of one year. Funds accumulated in the escrow account may be advanced for purchase of the home or home maintenance, subject to the guidelines of the FSS program.
Families that are determined eligible for homeownership assistance may exercise the homeownership option outside of GDPM's jurisdiction if the receiving public housing authority is administering a Housing Choice Voucher homeownership program and is accepting new families into its Housing Choice Voucher homeownership program.
Participants in the homeownership option program must initially complete a Purchase Agreement with the owner of the property to be purchased.
The Purchase Agreement must include the home's price and terms of sale, the GDPM pre-purchase HQS inspection requirements, and an agreement that the purchaser is not obligated to pay for any necessary repairs.
The participant must obtain an independent professional home inspection of the unit's major systems at the participant's expense. An ASHI member, candidate with logo privileges, or an NAHI regular member must conduct the independent inspection. In all cases, the inspection must cover major building systems and components, including foundation and structure, housing interior and exterior, and the roofing, plumbing, electrical and heating systems.
GDPM will conduct a Housing Quality Standards (HQS) inspection and will review an independent professional inspection of the unit's major systems. GDPM retains the right to disqualify the unit for inclusion in the homeownership program based on either the HQS inspection or the professional inspection report.
The household is solely responsible for obtaining financing. All loans must meet FHA mortgage insurance credit underwriting requirements. GDPM will review lender qualifications, loan terms, or other debt to determine that the debt is affordable.
GDPM establishes a minimum homeowner down payment requirement of at least 3 percent of the purchase price for participation in its Housing Choice Voucher homeownership program, and requires that at least one percent of the purchase price come from the family's personal resources.
There is no prohibition against using local or State Community Development Block Grant (CDBG) or other subsidized financing in conjunction with the homeownership program.
GDPM prohibits owner financing.
Housing Choice Voucher homeownership assistance will only be provided for the months the family is in residence in the home. The maximum length of time a family may receive homeownership assistance is fifteen years if the initial mortgage incurred is 20 years or longer. In all other cases, the maximum length of time is ten years. Elderly and disabled families are exempt from this time limit.
In addition to completing the pre-counseling program, the family must complete a contract for homeownership obligations prior to utilizing the Housing Choice Voucher for homeownership.
The family must comply with the terms of any mortgage securing debt incurred to purchase the home and any refinancing of such debt.
At any time the family is receiving homeownership assistance, the family may not sell or transfer any interest in the home to any entity or person other than a member of the assisted family residing in the home.
A home equity loan may not be acquired without the prior written consent of GDPM.
The family must provide required information regarding income and family composition in order to calculate correctly the total tenant payment and homeownership assistance, consistent with Housing Choice Voucher requirements.
While receiving homeownership assistance, the family must notify GDPM if the family defaults on a mortgage securing any debt incurred to purchase the home.
While receiving homeownership assistance, the family must notify GDPM before the family moves out of the home.
The family must, at annual recertification, document that he or she is current on mortgage, insurance and utility payments.
The family is prohibited from moving more than one time in a one-year period. The family may be required to participant in pre or post counseling prior to re-housing.
The family's Housing Choice Voucher monthly housing assistance payment will be the lower of the Housing Choice Voucher voucher payment standard minus the Total Tenant Payment or the monthly homeownership expenses minus the Total Tenant Payment.
Homeownership expenses include principal and interest on mortgage debt, refinancing charges of mortgage debt, taxes and public assessments, insurance, maintenance allowance for expenses, major repairs and replacements will be based on recommended allowance provided by its designees.
Housing assistance payments will be made directly to the assisted family.
If the family's income increases to a level that they are no longer eligible to receive a housing assistance payment, eligibility for such payments will continue for 180 calendar days. At the end of a continuous period of 180 days without any assistance payments, eligibility for Section 8 assistance will automatically terminate.
Lease to purchase agreements are considered rental property and subject to the normal tenant-based Housing Choice Voucher rental rules. All regulations of the homeownership program will be in effect at the time that the family opts to exercise the purchase.
If the family defaults on the home mortgage loan, the participant will not be able to use the homeownership voucher for rental housing but may reapply for the Housing Choice Voucher waiting list.
GDPM reserves the right to deny or terminate assistance for the family, and will deny voucher rental assistance for the family, in accordance with HUD regulations governing any failure to comply with family obligations, mortgage default, or failure to demonstrate that the family has conveyed title to the home as required, or if the family has moved from the home within the period established or approved.
GDPM's lease/purchase programs offer homeownership opportunities to low-tomoderate income families who have not owned a home for 3 years. These programs allow for a short-term lease of a home for six months, up to two years maximum, while the family prepares for eventual homeownership.
During the lease period, the leasing families are required to take homeownership and home maintenance classes. Some families may also be working to correct or improve on small credit issues so they can qualify for a home mortgage.
Applicants must meet eligibility requirements for residency, family income limits (minimum and maximum) and good credit, or credit than can be improved to mortgage loan quality within a year.
GDPM partners with several organizations in Montgomery County to provide families with homeownership classes, credit counseling, mortgage lenders and other assistance for first-time homebuyers.
For questions about Homeownership programs contact Karla Knox at 910-5319.
If I wish to purchase my first home but need help meeting the monthly mortgage and other homeownership expenses, is there a program that will help me?
Yes, it is called the Homeownership Voucher Program.
Who can I contact to obtain additional information about this program?Call the GDPM Family Self Sufficiency Department Housing Choice Voucher FSS Coordinators at the following numbers:
Talisha Elliott 910-5333 or Jasmin Mitchell 910-5419
- If I am currently a participant in the Housing Choice Voucher program and receive rental assistance can I use my voucher to buy a home and receive monthly assistance in meeting homeownership expenses?Yes, if you meet income and other eligibility requirements.
Are there any standards for the home to be purchased under this program?
The home must pass an initial housing quality standards inspection conducted by GDPM and an independent home inspection before GDPM may approve the purchase by the family.
What requirements must families meet to be eligible to apply for homeownership vouchers?
- First-time homeowner or cooperative member.
- No family member has owned or had ownership interest in their residence for at least three years.
- Except for cooperative members, no member of the family has any ownership interest in any residential property.
- Minimum income requirement. Except in the case of disabled families, the qualified annual income of the adult family members who will own the home must not be less than the Federal minimum hourly wage multiplied by 2,000 hours (currently $14,500). For disabled families, the qualified annual income of the adult family members who will own the home must not be less than the monthly Federal Supplemental Security Income (SSI) benefit for an individual living alone multiplied by 12 (currently $8,088). The PHA may also establish a higher minimum income requirement for either or both types of families. Except in the case of an elderly or disabled family, welfare assistance is not counted in determining whether the family meets the minimum income requirement.
- Employment requirement. Except in the case of elderly and disabled families, one or more adults in the family who will own the home is currently employed on a full-time basis and has been continuously employed on a full-time basis for at least one year before commencement of homeownership assistance.
- Enrollment in the Family Self Sufficiency Program.
- Homeownership counseling. The family must attend and satisfactorily complete GDPM's pre-assistance homeownership and housing counseling program.
What do monthly homeownership expenses include?
- Mortgage principal and interest.
- Mortgage insurance premium.
- Real estate taxes and homeowner insurance.
- GDPM allowance for utilities.
- GDPM allowance for routine maintenance costs.
- GDPM allowance for major repairs and replacements.
- Principal and interest on debt to finance major repairs and replacements for the home.
- Principal and interest on debt to finance costs to make the home accessible for a family member with disabilities if the PHA determines it is needed as a reasonable accommodation
How long can a family receive assistance under this program?
There is no time limit for an elderly household or a disabled family. For all other families, there is a mandatory term limit of 15 years if the initial mortgage incurred to finance purchase of the home has a term that is 20 years or longer, and for all other cases the maximum term of homeownership assistance is 10 years.
What is the family self-sufficiency (FSS) Program?
Family self-sufficiency (FSS) is a HUD program that encourages communities to develop local strategies to help assisted families obtain employment that will lead to economic independence and self-sufficiency.
How do families apply to the FSS program?
Families that are selected to receive a voucher or who currently receive assistance through the housing choice voucher programs should discuss participation in the FSS program with the DMHA Family Self Sufficiency Department Housing Choice Voucher FSS Coordinators at the following numbers:
Talisha Elliott Updike 910-5333 or Jasmin Mitchell 910-5419
What services are provided through the FSS program?
FSS program services may include, but are not limited to referrals for:
- child care
- job training and employment counseling
- substance/alcohol abuse treatment or counseling
- household skill training
- homeownership counseling
What families are eligible to participate in the housing choice voucher FSS program?
Families who receive assistance under the housing choice voucher program are eligible to participate in the FSS program.
How does GDPM select families for the FSS program?
Families interested in the FSS program voluntarily contact the FSS Department and are enrolled in the program by one of the FSS Coordinators.
What requirements must a family meet to participate in the FSS program?
GDPM and the head of each participating family execute an FSS contract of participation that specifies the rights and responsibilities of both parties. The 5-year FSS contract specifies goals and services for each family. Family members must fulfill all requirements in order to obtain full benefits. The FSS contract requires that the family comply with the lease, that all family members become independent of welfare, and that the head of the family seek and maintain suitable employment. Possible sanctions for non-compliance with the FSS contract are, termination from the FSS program, forfeiture of the FSS escrow account, withholding or termination of supportive services, and termination of housing choice voucher assistance.
What is the FSS escrow account?
An interest-bearing FSS escrow account is established by GDPM for each participating family. An escrow credit, based on increases in earned income of the family, is credited to this account by GDPM during the term of the FSS contract. GDPM may make a portion of this escrow account available to the family during the term of the contract to enable the family to complete an interim goal such as education.
If the family completes the contract and no member of the family is receiving welfare, the amount of the FSS account is paid to the head of the family. If GDPM terminates the FSS contract, or if the family fails to complete the contract before its expiration, the family's FSS escrow funds are forfeited.
What are the responsibilities of the FSS Program Coordinators?
FSS program coordinators assure that FSS program participants are linked to the supportive services they need to achieve economic self-sufficiency.
Does a family have to give up its rental assistance after the family completes its FSS contract?
No, although it is hoped that families will no longer need housing assistance upon completion of the FSS program, some families that complete the program will still need assistance for housing. The law provides that a family may complete its FSS contract and receive its escrow while continuing to receive housing assistance under the voucher program.