Many people find it a challenge to keep up with their housing costs. It is good to remember to keep housing costs up to at most 30% of your gross income per month. That is the only way that your housing costs can count as affordable, according to the definition from the United States Department of Housing and Urban Development (HUD). It can be a challenge for a lot of families to reach this. Fortunately, the HUD has housing assistance options available. Other than having housing support options for individuals to help them reach affordable housing, they also have support options to help individuals purchase or renovate their homes. This is why it is essential to look at what’s available.
Everything to Know about Popular HUD Assistance Programs
Some popular HUD assistance programs are:
- Housing Choice Voucher Program
- Public Housing
- FHA Loans
- HUD Homes
- Housing Opportunities for Persons with AIDS (HOPWA)
- Good Neighbor Next Door (GNND) Program
Housing Choice Voucher Program
One of the most common options on this list is the housing choice voucher program, also referred to as Section 8. This is a program that can offer housing vouchers to eligible recipients. These vouchers could be used to pay for a part of the housing costs that recipients need to manage. Recipients have the chance to choose the place that they want to stay in, but they can only choose housing properties that allow these vouchers as a form of payment. The properties must also meet local PHA requirements, which include passing a housing inspection.
This program is available from the HUD, but local public housing authorities (PHAs) are responsible for administering the program. PHAs get HUD funding, but they are the agencies that are in charge of the management of the program. It is important to remember that specific eligibility criteria can differ, depending on the area. There are generally four requirements that are important to local PHAs. These four requirements include:
- Citizenship Status
- Income Level
- Household Status
- Eviction/Criminal History
If you are interested to receive more information or start the application process, you should contact your local PHA. Individuals that need more help can get in touch with their local HUD Field Office.
Another common HUD housing support option is public housing. This program aims to offer decent and sanitary rental housing to eligible households at an affordable rate. There are different types of homes that are a part of this program; it is not just apartment complexes. As an example, public housing can also show up in the form of a single-family home. It might be a HUD program, but housing agencies (HAs) are the ones responsible for managing it. Specific eligibility requirements will differ. They will define who is eligible based on the below criteria:
- Income Level
- Household Status
- Citizenship Status
Even though references do not define whether an individual is eligible or not, it is still important to keep them in mind. This is because even people who are eligible based on income, family, and citizenship status cannot qualify if their references do not check out. References help the local HA determine if recipients will be good renters and neighbors to others. If you are interested in starting the application process, then you will want to contact your local HA. Individuals that need more help can get in touch with their HUD Field Office.
The Federal Housing Administration (FHA) is within the HUD. They insure loans that banks and other lenders offer. Through the insurance of these loans, the FHA decreases the financial risk that lenders might face. This is because the FHA will protect lenders against financial losses. It can be done by paying a claim to the lender for the unpaid principal balance of a loan if an individual defaults on their mortgage. Some of the benefits of these loans are that they have reduced down payment requirements and accept applicants that have a lower credit score than other loans. Other than a standard mortgage, there are some other forms of FHA mortgages that individuals might not know about. Some of these loan types include:
- Home Equity Conversion Mortgage (HECM): HECM is a form of reverse mortgage created for people who are at least the age of 62. Recipients of this mortgage can transform their home equity into cash while still keeping their home’s title.
- 203(k) Improvement Loan: This home loan comes with additional funds. The additional funds can be used towards managing repairs and renovation expenses.
- Energy Efficient Mortgage: This is also a home loan that comes with additional money. The additional money can be used towards improving homes to become more energy efficient.
- Section 245(a) Loan: When applicants think their income will increase, they may gain from this home loan option. The mortgage begins at a lower monthly payment but raises over time.
HUD Properties for Sale
Residential housing that the HUD owns is available for sale at a reduced rate. They belong to the HUD because they are a result of a foreclosure on a mortgage that the FHA insured. The HUD will provide the foreclosed properties for sale to try to recover the financial loss that comes with the foreclosure. If you want to look through these reduced properties, you should check out the HUD Home Store. There is a specific process when it comes to purchasing these homes, though. Only brokers that are registered with the government are authorized to sell them. The HUD Home Store is a good place to look for homes, but it is also a good place to learn more information on what it means to manage the home buying process with these properties.
Housing Opportunities for Persons with AIDS (HOPWA)
Different people have different battles to fight. This is why the federal government created HOPWA. This program can help eligible individuals that have HIV/AIDS receive housing. The program can help people through grants to several sources. These sources include non-profit organizations, local communities, state governments, and so on. There are two grants that sources can gain from, which are:
- Formula Grants
- Competitive Grants
The funds that sources get can assist people through housing support, social services, and much more. While eligible people (and their households) cannot directly gain from the HOPWA, they can gain from HOPWA-funded options available in their community.
Good Neighbor Next Door (GNND) Program
Another opportunity to purchase a home on this list is the GNND program. This program provides a 50% discount on the price of a home for qualifying recipients. To gain from this option, recipients must have an eligible job:
- Emergency Medical Technicians (EMTs)
- Law Enforcement Officers
- Teachers (from pre-K to 12th grade)
Other than needing to have a qualifying position, recipients must also remain dedicated to living on the property for a minimum of 36 months as their primary residence. Properties must be in revitalization areas that are exclusively for sale from this program. If you are interested in gaining from this option, then you should look through the listings in the state that you are staying in.
Once you find a home that you want, you will need to follow the instructions to show your interest. If the property you want gets more than one submission, then the interested individual will receive an offer that the program chooses through a random lottery. If the program chooses someone, the HUD will need the recipient of the home to sign a second mortgage and make note of the discount home amount. It is known as a “silent second.” There will not be any payments or interest on this silent second, so long as the recipient fulfills the occupancy requirement.
The Final Verdict
Not everyone has the same situation. This is why the specific housing assistance option that would suit your situation might not be the same for another person. Fortunately, there is a wide range of housing support options available from the United States Department of Housing and Urban Development (HUD). There might be more options than you think that could help out your situation.