HOMEfires - Vol. 3 No. 7, May 2001
Q: Can HOME funds be used in conjunction with the homeownership option of the Housing Choice Voucher Program?
A: The Quality Housing and Work Responsibility Act (QHWRA) of 1998, which amended the U.S. Housing Act of 1937, at section 8(y) authorizes a homeownership option in the Housing Choice Voucher program. The Section 8 Homeownership Program Final Rule was published in the Federal Register on September 12, 2000. The rule allows a public housing agency (PHA) to provide tenant-based assistance to an eligible family that purchases a dwelling unit that will be occupied by the family.
HOME participating jurisdictions (PJs) and PHAs should be aware that HOME funds can be used in conjunction with the homeownership option of the Housing Choice Voucher program. If PJs and PHAs collaborate under this option, both HOME and the Housing Choice Voucher programs may benefit. PJ participation in the homeownership option can provide an opportunity for communities to advance the HOME Program's goal of strengthening public-private partnerships and expanding the supply of affordable housing. In addition, combining these funding sources can enable PJs and PHAs to leverage resources available for homeownership assistance. When combining funds, the requirements of both programs must be met.
HOME homeownership assistance can be provided in a variety of forms, including downpayment and closing cost assistance, loan guarantees, write-down of the sales price, interest rate buy-downs, etc. Assisted homebuyers must qualify as low-income and occupy the unit as a principal residence. The unit to be purchased must be modest housing, defined as having a sales price not exceeding 95% of area median purchase price. The unit must be subject to resale or recapture requirements that conform with the requirements of 24 CFR 92.254(a) (http://edocket.access.gpo.gov/cfr_2004/aprqtr/24cfr92.254.htm) and are described in the PJ's approved consolidated plan. The term of lease-purchase agreements is limited to 36 months.
A public housing agency administering the housing choice voucher may now provide such assistance for the purpose of assisting first-time homeowners in meeting their monthly homeownership expenses. The family must qualify as a first-time homebuyer, meet a minimum income requirement, have income from sources other than public assistance (except for elderly or disabled families), meet an employment requirement (with the exception of elderly and disabled families), complete a homeownership or housing counseling program required by the PHA, and meet any other requirements established by the PHA.
Because HOME homeownership assistance can take a number of different forms, a homeownership program funded with HOME and homeownership vouchers can be designed to best fit the needs of the community and the beneficiaries. Potential uses of HOME and the voucher homeownership option include:
|Content Archived: May 19, 2011|