Understanding Different Housing Assistance Options

Housing is becoming a challenge for many Americans. It is important to keep in mind that there is a wide range of housing support out there–there might be more than you can imagine! This article will focus on different types of housing support options that might assist your current situation. We can hopefully point you in the right direction.

Different Types of Housing Assistance Options

There is a wide range of programs available that have been created to help people with housing. You can easily divide it into three sections:

  • Rental Assistance
  • Home Financing Support
  • Down Payment Assistance

Rental Assistance

Some people are not interested in buying a home, and some people do not have the financial means to buy a home. Rental assistance is a housing assistance option to consider. When it comes to rental housing, there is a wide range of housing options to think about! Two popular programs that you can think about are:

Housing Choice Voucher Program (Section 8)

A popular housing assistance option in the United States is the Housing Choice Voucher Program. Many people recognize this program as Section 8 housing. The idea of this housing option is to offer affordable housing to eligible recipients. Even though this program is available by the United States Department of Housing and Urban Development (HUD), local agencies such as Public Housing Authorities (PHAs) are responsible for managing and administering the program. 

If an applicant is eligible for the program, they will probably be placed on a waitlist. There are a lot of people who need this help but there is not enough support to assist. Once it is time for the applicant to get support, they will receive a housing voucher.

Recipients can use these vouchers towards covering housing costs in the private market. The way Section 8 works is that the local PHA would pay the voucher amount directly to the landlord. Not every home in the private market accepts these vouchers as a type of payment. Even the properties that accept housing vouchers cannot just take voucher holders as renters without following the right procedures. The right procedures include passing a house inspection that the local PHA performs. If you are interested in getting more information on this program, or you want to start the application process, then you will need to contact your local PHA. In the case that you need more assistance, then you can get in touch with your closest HUD Field Office.

Public Housing

Another popular rental assistance option for American households is Public Housing. Similar to Section 8 housing, this program is available from the HUD and it is also managed and administered at the local level. The local agencies responsible are Housing Agencies (HAs). Public Housing offers government-owned housing units to recipients with affordable rent. That means that the local HA would be your landlord! When most individuals think of Public Housing, they tend to think of apartment units. Public Housing can come in different forms too! For instance, you can find a single-family home as a type of Public Housing.

The amount of rent that recipients pay will be defined by several factors, including their gross income per year. Rent is referred to as Total Tenant Payment (TTP) under this program. Similar to Section 8 housing, applicants that are accepted will probably be placed on a waitlist before they can get assistance. If you want more information or to start the application process, then you should contact your local HA. In the case that you need more assistance, you can get in touch with your local HUD Field Office.

Home Financing Support

Many people find it challenging to finance the cost of purchasing a home. For this reason, it is important to think about home financing support options. Two popular support options that can help people include:

Federal Housing Administration (FHA) Home Loans

The FHA does not offer these loans directly. Instead, approved lenders are responsible for distributing these loans. The FHA is simply the agency that offers insurance for these loans. Through loan insurance, the FHA can decrease the risk that lenders face. The eligibility requirements are more flexible than a conventional loan because they accept lower down payments and lower credit scores. Individuals that have credit scores of no less than 580 can offer a down payment as low as 3.5%. Even individuals with scores less than 580 can still be eligible with a down payment of at least 10% as long as they are in the range of 500 to 579.

There is a wide range of different types of FHA loans, other than the conventional options that most individuals know about. Some common forms of FHA loans include:

  • Section 245(a) Loans
  • Home Equity Conversion Mortgages
  • Energy Efficient Mortgages
  • 203(k) Home Improvement Loans

Section 245(a) Loans

This type of mortgage begins with a low payment per month. These payments will increase as time goes on. One great benefit of this type of mortgage is that it reduces the overall loan term.

Home Equity Conversion Mortgages

Home Equity Conversion Mortgages (HECMs) are a form of a reverse mortgage. Since it is a reverse mortgage, it is only accessible to elderly homeowners. Elderly homeowners would need to be at least the age of 62. Eligible homeowners can tap into their home’s equity to receive funds. How they select to get these funds can differ, but they could choose from monthly payments, a credit line, or both!

Energy Efficient Mortgages

This mortgage type comes with additional funds for the homeowner to use. The extra money should be used towards managing energy-efficient costs. This includes energy-efficient home renovation expenses. The benefit of transforming your home into a more energy-efficient place is that it gives homeowners the opportunity to decrease their energy bills.

203(k) Home Improvement Loans

Finally, the last type of an FHA loan is the 203(k) Home Improvement Loan. This loan comes with additional funds for homeowners to use. The extra money should be used to manage housing costs such as home improvement expenses, home repair expenses, renovation expenses, etc.

Veterans Affairs (VA) Home Loans

The United States Department of Veterans Affairs (VA) provides this home loan option. Only eligible people will qualify to gain from this housing assistance option. The benefit of this loan option is that there is a possibility to finance a home with no private mortgage insurance (PMI) criteria, no down payment criteria, and forgiving credit score minimum criteria. It is important to keep in mind that the loan’s exact terms will differ based on the lender and applicant.

The way that a VA loan operates is similar to a traditional mortgage, but there are some regulations that are important to remember. This includes the following:

  • There is a VA funding fee
  • The lender cannot ask for a percentage more than 1% on closing expenses
  • There are no limits for VA loans

We may sound repetitive but the specific guidelines and regulations will differ based on the lender. For instance, even though there is no VA loan limit, a loan lender that the VA approves might set their loan limit.

Down Payment Assistance

Other than financing your home, you will need to consider presenting a down payment. This is why there is a wide range of down payment assistance options to think about. One specific helpful housing assistance option is the Chenoa Fund. This is a form of down payment assistance program that is available across the United States. The amount of down payment assistance that this housing support option can offer is no more than 3.5% of the home’s price.

This is not a program that you can find through the federal government. You will find this housing assistance option from the CBC Mortgage Agency. The CBC Mortgage Agency is a federally chartered government entity. The aim of this agency is to enhance homeownership sustainability and improve affordability. This agency does have a priority on specific groups of people such as individuals that find it challenging with their income or credit. Even individuals that do not have to worry about these issues might still gain from this option. Recipients will need to meet the minimum eligibility requirements to qualify.

Who Qualifies for the Chenoa Fund?

The minimum eligibility requirements will differ based on the home loan type. For instance, the minimum requirements for a person with an FHA home loan will be different from the minimum eligibility requirements of a person with a standard home loan. The minimum eligibility requirements for an FHA loan are as follows:

  • Have a debt-to-income ratio of at most 45%
  • Have a FICO credit score of at least 620

The minimum eligibility requirements for a person with a standard mortgage would be as follows:

  • Have a debt-to-income ratio of a maximum of 50%
  • Have at least a minimum FICO credit score of 640
  • Not have an interest rate be over 2% on someone’s first mortgage
  • Have a second mortgage term of 10 years

If someone is eligible to get Chenoa Fund assistance, then their down payment will show up in a repayable or forgivable second mortgage option.

Great Resources to Find Housing Assistance

Other than looking through the different forms of housing assistance mentioned above, you might also find a lot of benefits from looking through different resources. Some common resources that can provide helpful information to those in need include:

Benefits.Gov

If you are interested in looking through different government support options, then this should be one of the first resources you look through. This informative government website has details for more than 1,000 programs. Other than looking for programs by agency or category, there are other website tools that can help you navigate. This includes a famous tool known as the Benefit Finder Tool. The Benefit Finder Tool offers users the opportunity to offer details about their current housing situation. This includes information such as:

  • When you were born
  • Citizenship Status
  • Residency Data
  • Family Information
  • Income Information
  • Job Status
  • Marital Status
  • Disability Status

The more information that the user offers, the better results. The results of this tool can offer users a possible good housing assistance option for their current situation. While the tool does not offer a guarantee that the user will be eligible for the results they offer, it can guide them in the right direction. It is important to remember that the only true way to find out if you are eligible or not is by applying to the program you are interested in.

211.Org

Other than benefits.gov, another housing resource that can help you is 211.org. This website offers users the opportunity to look for local assistance information. While it has information on various supportive programs, it does provide a particular focus on people with housing expenses. This website can provide assistance for users to look for support opportunities for whatever housing situation that people need help with. That includes utility bills, rent payments, mortgage payments, and more. Despite that many people might not know that this resource exists, it supported 4.3 million connections that were able to avoid and decrease housing insecurity and homelessness for users that contacted the staff. 

The Final Verdict

There are more opportunities than you realize when it comes to needing housing assistance. The right housing assistance option will depend on your goals! Three different forms of housing assistance options are:

  • Rental Assistance
  • Home Financing Assistance
  • Down Payment Assistance

Additionally, you might gain from looking through resources that offer information about housing assistance. Some resources to think about are:

  • Benefits.gov
  • 211.org

You might have more housing assistance options for your current housing situation than you think. You need to be aware of the options out there and where you can look for assistance!