Home Ownership Opportunities For Borrowers

About HAP

Housing Authority Partners assists local housing authorities to provide home ownership opportunities to borrowers. Housing Authority Partners offers local governments Section 8 Assistance solutions to home buyer education and counseling, down payment assistance, and funding for local efforts to promote home ownership. Counseling and education on home ownership can help borrowers avoid situations that can cause borrower to become delinquent, and for those borrower’s that do find themselves in trouble, foreclosure prevention can help borrowers keep their homes.

Borrowers that are unable to continue to afford their home, can receive guidance on options such as deed-in-lieu and short sale that can allow a homeowner to leave their home without a foreclosure on their credit record.

Section 8 Housing Assistance

There are those receiving assistance under Section 8 Home Choice Voucher program under the Housing Act of 1937 (“Section 8”) that may be able to qualify for purchasing a home. In many areas, Section 8 recipients can buy a better place to live than they could rent for the same subsidized monthly payment, and in some cases find their monthly payments lower than renting. Under the Equal Credit Opportunity Act (ECOA), it’s against the law for a creditor to discriminate against applicants because of income from public assistance.

Home ownership, with its many benefits, can incentivize and assist Section 8 recipients to better their lives in ways that allow them to exit the Section 8 voucher program. Housing Authority Partners works with Section 8 recipients to find those that may qualify for purchasing a home. Housing Authority Partners, through its HUD approved counseling partners, provides counseling and education to qualifying Section 8 first time home buyers to help them prepare and qualify for home ownership. Because Section 8 borrowers are still responsible for making their own down payment, Housing Authority Partners works to provide down payment assistance to each qualifying Section 8 home buyer.

What families are eligible to apply for home ownership vouchers?

Families must meet these requirements:

• 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. 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. 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 home ownership assistance.
• Additional PHA eligibility requirements. The family meets any other initial eligibility requirements set by the PHA.
• Homeownership counseling. The family must attend and satisfactorily complete the PHA's pre-assistance home ownership and housing counseling program.

For more information, please visit https://www.hud.gov/

Home buyer Education and Counseling

Home ownership can be a big step for first-time homeowners or those returning to home ownership after extended rental periods. But even experienced homeowners can find themselves in difficult circumstances from time-to-time. There are self-guided tools and resources, and nonprofit counselors or advisers for more in depth assistance.

Not every potential home buyer should purchase a home—at least not right away. Many people need a little help putting their financial house in order before purchasing a home. Borrowers that would like to purchase a home, but can’t qualify because of no credit history or a flawed credit history, can receive assistance in resolving their credit issues so that they can qualify for the purchase of a home.

Down Payment Assistance

One of the principal obstacles faced by borrowers trying to get into home ownership, whether for the first time or after some time renting a home, is a down payment. Many of these borrowers have good credit and stable employment. Some may even have saved significant amounts, but rising home prices keeps a sufficient down payment out of reach, or the fear of purchasing a home and being left without savings keeps them from taking the leap into home ownership.

Because of a lack of down payment, many credit-worthy borrowers are delaying or even foregoing home ownership, which means that they and their communities are missing out on significant benefits associated with owning a home. It has been reported that the national median home appreciation from 2012 to 2015 was 8.2%, while the nominal median household income increased by only 2.5% over the same period. Because the current economic recovery has seen wages grow at a slower rate than home prices, many families find that their ability to afford a home is declining while they save for a down payment, often leaving them with a sense that home ownership is simply out of their reach. At the same time, these families are missing out on an opportunity for equity creation as well as many other benefits of owning a home.

Benefits Of Home Ownership

Owing a home allows families the opportunity for wealth building. Homeowners enjoy significant tax benefits from home interest deductions and tax-free wealth creation from rising home prices. More importantly, paying down a mortgage allows homeowners to retain part of their monthly housing expenses in sort of a forced savings plan rather than handing it over to landlords. This helps communities close the gap between the “haves and have nots.”

Rising rents have made it difficult for many potential borrowers to save for a down payment. In many areas, monthly rent is no more than a monthly payment on a similar home. Allowing these borrowers the ability to purchase a home puts them in a more stable position financially.

For communities, a healthy, well-functioning housing market is reliant on new homeowners entering the market to allow existing homeowners to trade up to their second or third homes. New home owners who move out of the rental market help take pressure off of rental prices, which not only allows other renters to better afford to save for home ownership, but also allows more people to afford to rent, taking pressure off of community shelter housing. In addition, a well-functioning housing market is critical to the overall economic welfare of a community. The sale of homes and new home construction contributes significantly to job creation across multiple industries, and some of the wealth created for families by home ownership flows through to increased consumer spending throughout the community.

Funding

Housing Authority Partners helps local governments access programs that provide funding for local affordable housing activities.