A New Home and a New Career Complete the Dream

Last September, a single mom did something she had never dreamed possible. Sylvia Ann Guerra purchased her own home, moving her children from a small apartment to a new three-bedroom, two-bath brick house in a quiet residential neighborhood.

"Our dream of owning a home has come true," she said. "Without this program, I don't think it would have been possible." Ms. Guerra and her two young sons live in Mercedes, a small town in the Rio Grande Valley. She works for the Weslaco Police Department as Dispatcher/Clerk and has completed the course requirements to be a peace officer in the State of Texas.
[Photo 1: Guerra's new home] [Photo 2: Ms. Guerra received a key to her new home]

The purchase was made possible by HUD's new Section 8 homeownership option program, which allows recipients of Section 8 federal housing assistance to apply their monthly rental vouchers toward purchase of a home. Qualifying families must earn at least $10,900 annually and have been employed full-time for at least six months.

Section 8 assistance payments supplement the family's income. In most cases, the family uses 30 percent of their monthly income for their house payment, and the housing assistance payment covers the balance. On average, it takes about six months to move a qualifying family out of rental-assisted housing and into a new home.

In the year it has participated in the program, the Mercedes Housing Authrotiy has moved two families out of apartments and into houses. They are currently working to place 38 other families. "A large part of what makes this program successful is that we make sure the families are well prepared to make the commitment," said a spokesperson for the Housing Authority.

Because the program gives families the option to buy a new home as well as an existing one, it also offers local builders an opportunity. In Mercedes, Bravo Construction, Guerra Construction & MDLS Investment are working with the local public housing authority to build homes under the program. The homes average 1,200 square feet and sell for about $62,000.

"These are not the homes people usually think of when it comes to Section 8," said Lucilla Bravo, owner of Bravo Construction. "These are brick homes with ceramic tile, master bath, garage and other amenities."

For lenders, the program offers new business possibilities. MHA lists Inter National Bank and First National Bank among participating banks and mortgage companies.

Robbie Hymel, Executive Vice President, Senior Loan Officer of Austin Loan Corp., views the program as an excellent way to improve the community's economic stability. He credits his flexible underwriting guidelines as the reason he can finance some of the families' mortgages under the home-ownership option program. "The families I have worked with have good credit, but for most conventional financing guidelines it's just not good enough," he stated.

The program requires a family to provide a 1 percent down payment with at least 1 percent coming from their personal funds. In Mercedes, the Urban County First Time Buyer Program has provided money to assist with down payment and closing costs. The City of Mercedes has also waived all fees for the construction of the homes.

Content Archived: July 22, 2011