What Is Section 8 Housing?

If you come from a low-income household and are looking for assistance paying your rent, you may qualify for assistance through Section 8.

Section 8 can also sometimes be used to help you buy a home via a homeownership voucher, but specific criteria must be met first. This article will explain what Section 8 Housing is, the eligibility requirements and how to a get a house through Section 8.

What Is Section 8 Housing?

The Section 8 Housing program was authorized under the Housing Act of 1937. The goal of the program is to provide low-income, disabled and elderly individuals with safe and sanitary shelter. This is facilitated through the Housing Choice Voucher program.

Vouchers provide low-income families with funds to make their monthly rent more affordable. The U.S. Department of Housing and Urban Development (HUD) oversees and funds the assistance program, but local public housing agencies administer the vouchers.

The public housing agency determines eligibility for the program based on family size and total annual gross income. Your gross annual income can’t exceed 50% of the median income for that area to qualify. And by law, 75% of the vouchers must go to families with a household income below 30% of the area’s median income.

If you qualify for Section 8 Housing, you’re expected to allocate 30% of your monthly adjusted gross income to rent and utilities. The remaining 70% is paid directly to the landlord by the public housing agency managing that family’s voucher.

What’s The Difference Between Section 8 And HUD?

Some people confuse Section 8 Housing with HUD housing, but these are different programs. One key difference is the housing types available. HUD housing is owned by the federal government and primarily consists of apartments and duplexes.

Section 8 Housing participants, by contrast, are free to rent private residences as long as they’re approved by the local public housing agency. If you qualify for Section 8 Housing, you can rent an apartment, condo, single-family home or duplex.

The income requirements are more lenient for HUD housing. Specifically, participants can earn up to 80% of the average income for their area. In comparison, the Section 8 income guidelines require participants to earn less than 50% of the average income for that area, with preference given to those earning below 30%.

Section 8 Housing Quality Requirements

Any residence you choose for Section 8 housing must meet the Housing Quality Standards (HQS) outlined by the HUD. All residences must meet specific requirements to pass these standards:

• Cleanliness
• Working kitchen area
• Sanitary bathrooms
• Working lights and electricity
• Water availability
• High air quality
• Working smoke detectors
• Sound structure and materials

In addition, the rent must be comparable to other units in that area. Also, the size of the unit must be appropriate for the number of members in your family. If you’re not sure whether the residence you chose meets these requirements, your public housing agency can help you figure it out.

Using Section 8 To Buy A House

As a part of Section 8, the Housing Choice Voucher can often be used to pay for homeownership costs. But it has some limitations. To qualify, you must:

• Be a first-time homeowner
• Take housing counseling
• Meet the minimum income requirements

If you qualify and complete the process, you can use your subsidy to cover part of your mortgage payment each month for years to come.

Not all public housing agencies offer an HVC homeownership program. If yours does, reach out to find out more about qualifying to buy a house with these vouchers in your area. If your local public housing agency doesn’t offer this program, consider calling to request that the office participate in the program.

Buying A House Through Section 8: Pros And Cons To Consider

A look at some of the pros and cons of buying a house through Section 8 now seems in order.

Pros

• Your housing expense requirement is low. The program requires participants to put 30% of their adjusted monthly income toward housing expenses.
• You’ll have more access to properties. Depending on where you live, you may have access to better homes than you could find as a renter.
• You’ll have help from the public housing agency. Your local public housing agency will assist you through the home-buying process.

Cons

• Your voucher will expire. Voucher support will end after 15 or 10 years if your mortgage repayment term is less than 20 years.
• You could have a long wait. Due to the high demand for Section 8 housing, it could take a good while for you to qualify for a voucher. In some areas, you can be on the wait list for several years.

Section 8 Eligibility Requirements

Some important eligibility requirements are worth keeping in mind as you figure out if you’re eligible for Section 8 Housing.

Income

To qualify for Section 8 Housing, your gross annual income can’t exceed 50% of the area’s median income. You’re expected to put 30% of your monthly adjusted gross income toward your rent and utilities. The HUD has an online tool that potential participants can use to determine whether they qualify for Section 8 Housing.

Citizenship Status

To prove your identity and citizenship status, you must include the following information on the Section 8 Housing Voucher program application:

• Name
• Date of birth
• Social Security number
• Annual gross income
• Mailing address

Criminal History

Next, participants must provide some background information about any criminal history on file. Having a record doesn’t automatically prevent you from qualifying, but anyone listed on a sex offender registry won’t qualify.

Eviction History

Program officials will look into your previous rental history to make sure you were a reliable and responsible tenant. They’re especially looking for any evictions, with a particular focus on whether these evictions were crime-related. You’ll most likely not be approved for the Section 8 program if you’ve ever been evicted from a rental property.

Once you complete your application, you’ll be rejected or placed on a waiting list. Even if you qualify, there’s a good chance you’ll be rejected due to the high demand for the program.

How To Apply For Section 8 Housing

If you meet the requirements for Section 8 Housing, you can apply for the program in a few steps.

Step 1: Seek Out Your Local Housing Authority

The first step is identifying your local housing authority. You can find your local public housing agency by state, city and ZIP code.

Step 2: Determine Your Eligibility

Next, you’ll work with your local public housing agency to determine your eligibility for Section 8 Housing. Eligibility is based on your family size and annual gross income. As a general requirement, your income can’t exceed 50% of the median income in your area.

A local public housing agency will sometimes show preference for certain individuals receiving housing assistance first. For instance, local residents or those dealing with homelessness or a disability may receive preferential treatment. If you qualify, be sure to let the public housing agency know so you can shorten your waiting time as much as possible.

Step 3: Fill Out The Application

Assuming you qualify for Section 8 Housing, you’ll need to fill out the program application. The free application is available online and by mail. You’ll need to provide information about your income, citizenship, criminal history and eviction history.

Step 4: Confirm Your Waiting List Status

After you’ve submitted your application, you’ll find out your waiting list status. If you live in an area with a high demand for Section 8 Housing, you could end up on the waiting list for years. Once your application is processed, you can confirm your waiting list status through an online portal.

Step 5: Find Affordable Housing

Finally, once you receive your voucher, you can begin looking for affordable housing. You have 60 days to use your voucher after you receive it. Look for housing that accepts Section 8 vouchers and meets the program requirements.

Once you’ve chosen a home, you’ll sign a minimum 1-year lease with your landlord and may be required to put down a security deposit. You can expect to pay 30% of your monthly income toward rent, and the public housing agency  will pay the remainder directly to your landlord.

If you decide to move after a year, you can do so without interrupting your Section 8 voucher benefits. But you must let the public housing agency know ahead of time, and your new residence must meet HUD housing requirements.

The Bottom Line: Buying A House With Section 8 Funds Is A Possibility

If you need help finding affordable housing, Section 8 Housing could be a good fit. It provides safe and affordable housing to low-income families. And though the program is aimed at providing rental income, you can use the funds from the Section 8 homeownership voucher program to buy a home.

However, it can take a long time to get approved for the program. Some individuals stay on the waiting list for years before getting approved for Section 8 Housing.

If you’re looking to buy a house and don’t want to wait to get approved for Section 8 Housing, there are other options you can consider. Contact a Home Loan Expert to explore your options and get your housing questions answered.