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Home buying assistance from HUD section 8 vouchers.

The Housing and Urban Development section 8 program can help low income families as well as those living in poverty purchase a home. The Housing Choice Voucher can be applied to pay a mortgage as well as other costs (closing expenses, property taxes, etc.) instead of rent. It is one of the main federal government programs that both encourage home ownership as well as provides financial help to low income families.

In July of 2016, the HUD Housing Choice Voucher (HCV) program - more commonly known as Section 8 - made it possible for recipients to purchase a house instead of renting. The government funds can be applied to paying a mortgage payment, based on the recipients income.

There is a misconception that Section 8 is just for helping with paying for emergency housing of individuals who are homeless, living in dire poverty or on the brink of a housing catastrophe. While it can certainly help people who are in such precarious situations, the broader focus of the program is on giving low-income recipients who are already housed a means of moving into a home or apartment for quality-of-life issues. As part of this, the HUD HCV voucher can therefore be applied to a mortgage, as that homebuying experience is after all part of the American Dream.

HCV income limits vary by area according to local cost-of-living factors and median family income estimates, but in many cases families that are making a working-class income are eligible for a voucher that simply limits their rent payments to 30% of their annual income.

The section 8 home buying option is aimed at these working lower to moderate income individuals and families as well as the disabled or single parents/mothers. Prospective homeowners must meet a number of added requirements. At least one member of the family must be working at a full-time job (at least 30 hours per week), and all of the working adults in the family combined must earn at least 2 times one hour of current federal minimum wage pay. Exceptions are made for program participants classified as disabled or elderly (age 62), who are able to use welfare payments (such as SSI) to qualify for section 8 mortgage assistance.




Voucher recipients must obtain a mortgage to pay for the house that they select. This can be done by a number of banks, lenders, and government programs too. They then need to use the voucher is applied to their monthly mortgage payment instead of a rent payment.

Who Does Section 8 Home Ownership Make Sense For?

While a home purchase might still seem like an iffy idea for program participants in that income category, it can open up options where there were previously none available.

The HCV program has been plagued with issues since it began in 1974. In most areas, landlords are not required to accept vouchers. This often leads to a very limited stock of available rental units or apartments. Additionally, the program often has a long waiting list. It is also often a magnet for problem properties in rough neighborhoods that have trouble filling their units. Voucher recipients can find themselves left with a small selection of unappealing options, if any units are available at all. And if they can't find a place to use the voucher in 60 to 90 days, they lose it.

The ability to purchase a house opens up new and better options for working individuals and families in this situation. However, those that meet the income requirements for this low income home buying assistance program still have some limitations to consider:

  • The local public housing agency (PHA) must be participating in the Homeownership Voucher Program (HVP). Most are, but some are not.
  • Combined family income must be no more than 50% of the area media, adjusted for family size.
  • Must be a first-time home buyer, unless a family member has a documented disability.
  • Must be able to obtain a mortgage independently and cover the down payment (generally 3%). Or some other form of interest free loans.
  • Expect to be able to take over full payments in 10 to 15 years depending on the length of the mortgage.
  • Not currently using a Section 8 voucher to pay for a federally subsidized housing unit (i.e. in a housing project).
  • Local PHAs may have their own unique rules - for example, having rented a non-federally-subsidized Section 8 unit for at least a year prior to being approved.





Mortgage assistance from the HUD Section 8 program

If all of this makes it sound like the target audience for these financial assistance programs is small, you're right. HUD estimates that only tens or hundreds of thousands of individuals and families may qualify if they apply, and that out of approximately five million households receiving Section 8 in the country!

Part of this may simply be lack of awareness of the option. The HVP voucher has not been heavily publicized since it was introduced. Section 8 recipients may also assume that they simply make too little money to even think about buying a house. There are additional assistance programs that can be used in tandem with a HVP voucher to make a mortgage on a modest house feasible while remaining within Section 8 income limits, however.

For example, there are quite a few state-administered and local programs that assist low income families with paying down payments on a new home. Down payments are generally 3% of the house price, but lenders have different rules. PHAs generally allow 2% of the house price to be covered by another assistance program leaving the eligible program participant with as little as a 1% down payment to get started.

HUD also allows voucher recipients to apply for a Federal Housing Administration (FHA) loan to finance the property, which is easier to obtain and could ultimately leave the buyer with only a 1.5% down payment when paired with other assistance. Find other details on how to get mortgage assistance.

The ideal candidates will have good enough credit to obtain a mortgage plus an acceptably low debt-to-income ratio. They will also most likely need to already have a year in with Section 8 at a rental that is not federally subsidized. Provided they meet those requirements and can find an affordable house in their area, home ownership as well as direct mortgage help is very possible for Section 8 recipients. To learn more or apply for a low income home buying program from Section 8 vouchers, dial (800) 955-2232 or contact an office.


By Jon McNamara

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