Written By: Daniel Garcia
For those of us that work with many first-time homebuyers or low-to-moderate income buyers, we may from time-to-time come across a client that has a Section 8 Homeownership Voucher. This program was introduced by HUD as a way to increase homeownership for low-to-moderate income families. It works very similar to the Section 8 Rental assistance program in which the voucher will pay a portion of the borrower’s mortgage payment each month for up to 15 years or the entire term of the mortgage if one of the borrowers is disabled.
Need FHA Training? CLICK HERE: http://www.FHA-Classes.org
This program is an excellent way of helping families purchase their own home. However, there are many things to keep in mind if you are processing a file that is utilizing this Section 8 Homeownership Voucher. I’ve included a list of some of these things below:
• First and foremost you must ensure that your investor guidelines will allow the use the voucher. Although many mortgage programs allow it, such as FHA, many investors will not purchase a loan in which the borrower is utilizing this voucher.
• Although the voucher pays a portion of the mortgage payment, we as processors must indicate the assistance amount as income. It will be entered on the 1003 in Section V under “Other” income.
• Homeownership Voucher Program guidelines do not allow non-purchasing spouses. In other words, if you have a file in which the financing is only in the wife’s name, it’s a no-go. The husband MUST be on the loan as well.
• Units assisted under the voucher homeownership program must meet HUD’s Housing
Quality Standards (HQS) as identified in 24 CFR § 982.401 before the homeownership
voucher assistance can be approved. In fact, two inspections are required for a unit to
be approved for assistance: an HQS inspection, performed by the PHA’s inspector, and
a professional home inspection conducted by a qualified independent home inspector
that is hired by and paid for by the family.
• Families who wish to participate in the Homeownership Voucher Program must first
attend and complete a homeownership counseling program required by the PHA per 24
CFR § 982.630. The family must receive this counseling by a HUD approved counseling agency.
Need FHA Training? CLICK HERE: http://www.FHA-Classes.org
So these are the basic things to look for when utilizing this type of assistance. For further information on the program you can go to HUD’s website at the following link:http://www.hud.gov/offices/pih/programs/hcv/pubs/hcvguidebook.pdf.
Stay tuned for more useful information. Make it a great week.
About The Author
Daniel Garcia - As an NAMP® staff writer, Daniel Garcia is a loan processing instructor for Loan Processor University (www.LoanProcessorTraining.org). Daniel also currently works for a non-profit housing and community development corporation where he serves as a senior loan officer and heads up the organization’s homebuyer education program. Daniel provides consultation services to other non-profit housing organizations nationwide, training in the areas of mortgage qualification and processing, state and federal laws, adult education training methods, and credit/foreclosure intervention counseling and program setup. He has gained a variety of experience, from mortgage processing and loan originating to loan servicing and loss mitigation. If you're interested in becoming a writer for NAMP®, please email us at: contact@mortgageprocessor.org.
