A rent-to-own apartment is beneficial for homebuyers who need time to prepare for the purchase. Prospective buyers may need to save for a down payment, improve their credit score, or earn more income.
Depending on the rent-to-buy contract, a portion of the rental payment may go towards the purchase. For example, a renter may pay $1,000 each month, but $150 goes towards the sale. That renter could put $1,800 each year to reduce the purchase price.
The Section 8 homeowners program has several requirements. Applicants must meet the:
- Section 8 requirements. Applicants for homeowner vouchers must first be HCV participants, and they must also receive vouchers from a Public Housing Agency that offers this option. Not all PHAs let enrollees use vouchers towards mortgage payments.
- Employment requirements. Applicants must have jobs unless they fit the program’s definition of elderly or disabled (see below). Applicants must have full-time employment or work for at least 30 hours weekly. They should have had the same job for at least a year at the time of the application.
- Income requirements. Income is specific to the median earnings in the area where individuals live. Generally speaking, qualifying applicants have a household income at or less than 50 percent of the median income for the area. However, their income must be higher than the federal minimum hourly wage multiplied by 2,000.
- Homeownership requirements. Applicants must be first-time homebuyers, which means that they are purchasing their first home ever. Former homeowners can still qualify for first time home buyer programs if they have not owned a home in the last three years.
- Counseling requirements. Applicants will need to complete homeownership and housing counseling that may cover budgeting, money management, credit scores, and home maintenance.
HUD considers those 62 years of age or older as elderly. For the homeowner voucher program, the head of the household or their spouse must be at least 62 years of age to be an elderly family.
A disabled family has a head or co-head of a household that has a qualifying physical, mental, emotional, or developmental impairment. The impairment must be long-term or permanent and affects their ability to live independently.
The local PHA may have additional requirements. Likewise, states have different programs, which each have specific requirements. For example, applicants may also qualify for other HUD home buying programs, such as the Good Neighbor Next Door. The GNND program cuts certain property’s list price in half for teachers, firefighters, emergency medical technicians, and law enforcement officers.
Do you think you meet the requirements for the Section 8 homeownership program? Learn how to submit an application and what to expect during the process.