| HUD No. 06-071
June 22, 2006
THOUSANDS OF FAMILIES USE HUD HOUSING VOUCHERS TO BUY HOMES
Chicago Housing Authority leads others to create nearly 140 new homeowners
CHICAGO - More than 5,000 low to moderate-income families have become homeowners thanks to an innovative voucher homeownership program instituted by the U.S. Department of Housing and Urban Development (HUD). The impressive program results are outlined in the Voucher Homeownership Study (VHO) released today by the agency.
HUD Secretary Alphonso Jackson announced the study findings at City Hall with Mayor Richard Daley and Chicago Housing Authority Executive Director Terry Peterson. The study shows that the Chicago Housing Authority, under its subsidiary CHAC, Inc., is leading the way in helping low-income families become first-time homeowners using the Housing Choice Voucher Homeownership (HCVH) Program. CHAC, Inc. has had 138 home purchase closings since 1999.
"It pleases me to announce the results of this HUD report in Chicago during HUD's celebration of National Homeownership," said Jackson. "With CHA and other housing authorities' success using this important program, we are sure to meet the President's goal of creating 5.5 million new minority homeowners by 2010."
CHAC, Inc. is among more than 506 public housing authorities (PHAs) that are participating in the HCVH program since it began in 1999 as a pilot at just a dozen PHAs. HUD's Office of Policy Development and Research (PD&R) commissioned the VHO Study to evaluate the effectiveness of the HCVH Program from September 2004 to March 2006, and reports rapid growth in the program. It complements a 2003 PD&R study that looked at how the pilot PHAs implemented the program. The current study provides a national snapshot of the VHO program and its successes. These reports are available as free downloads online.
- 85 percent of the PHAs have engaged program partners to provide pre-purchase counseling to program participants.
- In most programs, VHO purchasers have access to additional funding sources to help them buy homes.
- Foreclosures have been very rare, with only 4 percent of PHA respondents having reported any foreclosures.
- VHO purchasers were primarily female heads of household (61 percent) with children (74 percent) were members of minority groups (58 percent).
- VHO programs serve a substantial proportion of people with disabilities at 32 percent, or about one-third of purchasers overall.
The VHO Program is a component of the Housing Choice Voucher program, formerly known as Section 8. It is designed to promote and support first-time homebuyers by allowing the vouchers to be used for monthly homeownership expenses, rather than for monthly rental payments. Monthly expenses include the principal and interest on the mortgage, real estate taxes and insurance, and the PHA established allowances for utilities, routine maintenance, and major repairs and replacements.
In April 1999, HUD issued a proposed rule for the Housing Choice Voucher VHO program. In September 2000, the final rule was issued and HUD established basic program guidelines, but gave PHAs broad discretion on implementation. HUD began with 12 housing authorities participating in 1999; by early 2004, there were 300 PHAs operating voucher homeownership programs, and roughly 2,000 homes had been purchased through the program. By December 2005, more than 450 PHAs were operating VHO programs, and more than 4,000 purchases had been reported. Today, there have been just over 5,000 home-purchase closings across the country.
By increasing resources for HUD's housing counseling services and encouraging lenders and community banks to partner with its public housing agencies, HUD's goal is to increase that number to 10,000 families by 2008.HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and espanol.hud.gov. For more information about FHA products, please visit www.fha.gov.