Housing assistance programs from the federal government pay out hundreds, even thousands, of dollars to low-income Americans. Through the rent to own program offered through Section 8, you could get thousands of dollars in free government subsidies to use toward your first home.
If you qualify for the Section 8 homeownership program, you will need to provide a down payment of at least 3%. At least 1% of that must come from your own financial resources, like a savings or checking account.
The goal of the rent to buy program is to ease the transition from renters to homeowners for those who are classified as working, low-income families. As long as at least one member of the house is working 30 or more hours, the household maintains eligibility.
Section 8 rent to buy participants are only required to pay 30% of their monthly income toward their mortgage. The remaining amount is covered by the housing vouchers provided by the governing public housing authority, or PHA.
So, how much money in housing assistance can you expect to receive through the homeownership program? That depends on your loan term.
- If your mortgage is expected to last for 20 or more years: the PHA will give you housing vouchers to help you pay your mortgage bill for up to 15 years.
- If your mortgage is expected to last for less than 20 years: the PHA will give you housing vouchers to help you pay your mortgage bill for up to 10 years.
Once the assistance period ends, Section 8 homeownership participants are required to pay their mortgage bill in full each month.
Finding approved rent-to-own homes can be a bit tricky. You can’t buy just any house using Section 8 vouchers. Most PHAs have clearly defined criteria for the kinds of dwellings you can purchase with housing vouchers.
A quick search of “rent to own homes near me” may return a long list of results. However, not all those houses may be approved by the PHA.
For example, some PHAs restrict homes to certain size limits. Others may require the homes to be located in specific areas.
If you are struggling to find rent-to-own homes in your area, you may benefit from the guidance of a real estate agent. These agents are well versed in the rent to buy process and may be familiar with your local PHA. They can help you find homes that accept Section 8 housing vouchers.