COC

Housing Choice Voucher Homeownership Program

The Compton Local Housing Authority has established a Section 8 tenant-based voucher homeownership option in Compton, California, pursuant to the U.S. Department of Housing and Urban Development (HUD) proposed rule dated April 30, 1999 and pursuant to Section 555 of the Quality Housing and Work Responsibility Act of 1998, authorizing HUD to carry-out demonstration programs under Section 8(y).

The basic concept for what is now called the Housing Choice Voucher (HCV) Homeownership Program is that a PHA may choose to allow families receiving HCV rental assistance to use their subsidies for homeownership rather than for rental purposes. PHAs apply the HCV subsidy to monthly homeownership expenses (mortgage payments), instead of paying a landlord rental housing assistance.

 

OVERVIEW

The basic concept behind the Voucher Homeownership Program is that, instead of using the voucher subsidy to help a family with rent payments, the homeownership option allows first-time homeowners to use the voucher subsidy to meet monthly homeownership expenses.

Under the Homeownership Voucher option, families are responsible for finding an eligible property they wish to purchase. Homeownership assistance payments are provided to help the new homeowner with monthly homeownership payments. The Housing Authority uses the same voucher payment standard amounts for families pursuing the homeownership option. The monthly homeownership assistance payment (HAP) is calculated as the lesser of:

Payment standard minus family total tenant payment (TTP), or

Family’s monthly homeownership expenses minus family TTP.

To be eligible for the homeownership option, a family must be a current voucher program participant or be eligible for admission to the Housing Choice Voucher program. Families must be employed full-time (at least 30 hours per week) and must have been employed for at least one year. Families are not eligible if any family member has previously received homeownership assistance and has defaulted on a mortgage. Eligible families must also satisfactorily complete a homeownership counseling program required by the Housing Authority.

 

Eligibility for the HCV Homeownership Program:

In order to participate in HCV homeownership, a family must have an HCV rental voucher or be eligible for a voucher through an HCV homeownership program. The family must be a first-time homeowner (has not owned a home in the past three years). At least one adult member of a non-disabled family must be currently employed full-time (30 hours per week), and have been so employed during the past 12 months. The head or spouse must be employed full-time continuously during the year before commencement of homeownership assistance. The program will give priority to participants in the Family Self-Sufficiency program (FSS). The participant will be required to provide one percent of the home purchase price as a down payment. The family’s income must be equal to or exceed two times the payment standard for the family’s unit size. No public assistance income may be used for meeting this requirement (i.e., Welfare Grant, TANF, SSI, Food Stamps, and General Assistance). Participants and applicants must complete required pre-assistance homeownership counseling.

Units eligible under the HCV are units that are under construction (ground has been broken, and foundation laid prior to family contracting for the unit) or already existing units, including single family homes, condos, town homes, and manufactured homes (with certain restrictions). Property must meet environmental requirements and pass both HUD’s Housing Quality Standards inspection and an inspection by a licensed independent professional before the family can close on the home.

The Housing Authority will provide assistance payments based on the payment standard for the family’s voucher size allocation, minus the family’s “Total Tenant Payment.” The family is responsible for securing its own financing.

 

The maximum term of HCV homeownership assistance is 15 years if the mortgage term is 30 years or longer. These terms limits do not apply to elderly or disabled families.

 

In order to continue receiving HCV homeownership assistance, a complete annual recertification of family income and composition must be completed. The family must also comply with family obligations under the program, as well as comply with additional requirements set by the Housing Authority.