Homeownership for People with Disabilities

Section 8 Homeownership

So far, we have been discussing ways that anybody with a low income or limited savings can use to purchase a home. However, there is a whole different path to homeownership for people who get subsidized rent through the Section 8 program. It could be of particular interest for people with disabilities who get public benefits like Supplemental Security Income (SSI).

Section 8 Voucher Program

Let’s start by understanding subsidized rent. The U.S. Department of Housing and Urban Development (HUD) helps people with very low, low, and moderate incomes rent property in 2 main ways:

  1. By supplying subsidized housing directly. If you qualify, you can live in public housing properties funded by HUD and pay below-market rent.
  2. By paying most of the rent in private apartments or homes for qualified people with low incomes through the Section 8 program. If you qualify, you pay about 30% of your family’s adjusted monthly income as rent. The government pays the rest of the rent to the private landlord. A person or family who uses this program is given a “Section 8 voucher.”
Section 8 rental example

If a person with a Section 8 voucher makes $1,000 per month and lives in an apartment with a $900 per month rent, the Section 8 tenant might pay around $300 per month and the government would pay the landlord the other $600.

The Section 8 Voucher Program is explained in more detail in the DB101 article on Housing.

Section 8 Homeownership Program

Although optional, some local Public Housing Authority (PHA) offices supply qualified applicants with the opportunity to use their voucher to buy a house instead of renting a place. If a Section 8 voucher holder buys a home through the Section 8 Homeownership Program, Section 8 helps with paying the mortgage instead of helping with rent.

If you buy a home through this program, you pay about 30% of your family’s adjusted monthly income as your monthly mortgage payment. The government pays the rest of the monthly mortgage payment. When the mortgage is fully paid off, you will be the owner of the home and the government has no further involvement. You won’t be on Section 8 anymore, but that is okay because you’ll own your own home and won’t owe anything on it!

Section 8 can be a great opportunity to buy a home, but there are several factors about it that you should keep in mind:

  • You must already be a Section 8 voucher holder to participate in it.
  • To apply for Section 8, you have to get on a waiting list that is open. Many waiting lists are closed and it can take several years just to get on the waiting list.
  • The Homeownership Program is optional for public housing authorities (PHAs) and is not offered by all. Check with Arizona public housing authorities to see if they offer it.
  • If you are buying a home in a place where there are lots of buyers and few people selling homes, it may take many attempts to get an offer accepted.
Steps to Section 8 homeownership success
  1. Be a Section 8 renter. If you do not already have a Section 8 voucher, you cannot buy a home using the Section 8 program.
  2. Contact the Section 8 Homeownership coordinator at your Public Housing Authority (PHA). If your PHA does not offer the Section 8 Homeownership Program, you need to “port” (transfer) your voucher to a PHA that does offer the program.
  3. Attend all required counseling sessions and classes.
  4. Get referred by the Section 8 Homeownership coordinator to a lender for financing.
  5. Work with the lender to get approved for a mortgage loan.
  6. Select a realtor to help you find a home.

Most Public Housing Authorities (PHAs) will be able to refer you to local realtors and lenders who can help you. If they cannot or if you are researching this on your own, be very careful about your lender and realtor. It is important to have a lender and a realtor who know how the Section 8 Homeownership Program works in your area, who have relationships with the local Public Housing Authority staff that administer the program, and who understand the paperwork. This will help your purchase go more smoothly; it will also give confidence to home sellers that you are a capable buyer of their home.

There are a few other things to consider when thinking about the Section 8 Homeownership option:

  • The housing authority sets standards that decide the amount of subsidy assistance (financial help) you can get. Generally, if you get more subsidy assistance, you can purchase a higher-priced home.
  • You have to be very patient. From the day you sign up for the Section 8 Homeownership Program to the day you get the keys to your new home could be several years.
  • It is difficult, but not impossible, to buy short sales or foreclosed properties with this program. In some areas where home prices are the cheapest, many of the homes for sale can be foreclosures or short sales.

You can read more about the Section 8 Homeownership Program in the DB101 article on Housing.

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