SECTION 8 HOMEOWNERSHIP PROGRAM

Revised 1/2020 Page 1

Housing Choice Voucher:

Homeownership Program

Frequently Asked Questions

1. What is the Housing Choice Voucher

Homeownership Program?

This program is designed to assist families in reaching

the dream of homeownership, while having the

security of the Section 8 Program. The program

allows the monthly assistance payment to be used to

cover mortgage and other homeownership costs.

2. How do I know if I am ready for

Homeownership?

Owning a home is a huge responsibility and

understanding that responsibility is essential to your

success as a homeowner. That is why it is mandatory

that you attend Homeownership Counseling prior to

purchasing a home. The classes will provide you with

information you need to help you decide if

homeownership is for you. You should also clean up

any credit issues and begin saving for a down

payment.

You can get a better idea if you are ready for

homeownership by asking yourself the following

questions:

 Do I have a steady source of income?

 Have I been employed on a regular basis

for the last year?

 Is my income reliable?

 Do I have a good record paying my bills?

 Do I have money saved for a down

payment?

 Am I financially ready for home repair

costs?

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3. What are the eligibility requirements?

 Must be a current MaineHousing Section 8

Housing Choice Voucher participant in good

standing for at least one full year.

 Must have an annual income of at least $18,500,

excluding welfare (except for families in which

the head, spouse, or co-head is elderly or

disabled). For families in which either head,

spouse, or co-head is disabled and/or elderly the

minimum annual income needs to be at least

$9,396. This minimum income requirement is

based on all adults who will be on the mortgage,

not just the Head of Household.

 One adult family member must be working full

time, at least 30 hours per week. This minimum

employment requirement does not apply to

elderly or disabled families.

 Must have been continuously employed for the

prior year. Must continue to work 30 hours per

week as long as you are subsidized through this

program unless you become disabled.

 Must qualify as a first time homebuyer, not owned

a home within the past three years. Exception is

made for single parent/displaced homemaker

families that owned a home with a prior spouse.

 Must successfully complete

HUD/MaineHousing-approved Homeownership

Counseling prior to purchasing a home.

 Must have sufficient funds available to cover the

cost of an independent home inspection

(Typically $500-$1000). Verification is required.

 Must be able to secure financing independently

for the purchase of the home. This will require

that the applicant to have a good credit rating.

• Must complete Pre-Purchase Counseling with

HCV HomeOwnership Coordinator.

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4. How do I obtain financing?

The family is responsible for securing its own

financing. We anticipate that lenders will take into

consideration the Section 8 Assistance you will be

receiving, but we cannot mandate that they do so.

5. Are there any financing restrictions?

Yes. MaineHousing will prohibit the following forms

of financing: Balloon Payment Mortgages, Variable

Interest Rate Loans, Seller Financing, and predatory

lending practices.

MaineHousing has final approval as to whether

the financing arrangement is affordable.

6. Do I have to have a down payment?

You may be required to have a down payment. This

can range from 1% to 5% of the purchase price

depending on type of financing.

7. What other costs are there?

You will have to pay for an appraisal, which will cost

around $300 and a professional inspection, which will

cost from $300-$500.

There may be other incidental expenses prior to your

purchase such as; credit report fee, prepaid insurance,

taxes, attorney fees and title fee. Depending on how

you finance your home these costs may be rolled into

the mortgage or your lender may require that you pay

for them out-of-pocket. Typically, these expenses

range from $1500 to $3000, in addition to your down

payment.

8. How does the Lender determine how much I can

pay for a home?

The amount you are able to pay for a home depends

on your total income and resources. The mortgage

lender will consider your debt-to-income ratio, which

is a comparison of your gross (pre-tax) income to

housing and non-housing expenses. Non-housing

expenses include such long-term debts as cars,

student loans, alimony or child support. The lender

also considers cash available for down payment and

closing costs, credit history, etc. The lender will pre-

qualify you for a loan based this information. It is

important to have this pre-qualification before you

begin shopping for a home. MaineHousing will not

allow you to pay any more then 40% of your

monthly adjusted income towards your total

housing expense.

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9. How long will I continue to receive Section 8

Homeownership Assistance?

Families are eligible to receive homeownership

assistance for a maximum of 15 years if the mortgage

is 20 years or more and 10 years for loans with terms

less than 20 years. For families in which the head of

household, spouse, or co-head is elderly or disabled,

the homeownership assistance continues for the life

of the loan. Continuation with the program requires

that you must remain eligible for Section 8 assistance

and comply with all the rules, regulations and family

obligations.

If your Section 8 assistance is terminated

for any reason, you are responsible for the

full mortgage payment.

10. Can I lose my Section 8 Homeownership

Assistance?

Yes. You are subject to the same Family Obligations

as in the Rental Voucher Program. You must be re-

certified each year.

Your homeownership assistance will be terminated if

the family is dispossessed from the home due to a

judgment or order of foreclosure.

11. Once I have purchased a home will I still have

an annual re-certification every year?

Yes. You will need to submit all the paperwork for

re-certification each year and you will have to

continue to conform to all the Section 8 rules and

regulations.

12. Do I need to get my home inspected?

Yes. There are two required inspections. You must

hire a professional home inspector prior to closing

and the Housing Authority will provide a HQS

inspection.

13. Can I sell my home?

Yes, a borrower can sell as long as the loan is paid in

full. MaineHousing must approve any sale that is for

less than balance owed on property.

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14. How does MaineHousing help pay the

mortgage?

The Housing Authority will execute a “Statement of

Homeowner Obligations”.

The Housing Authority will make payments directly

to the buyer; in turn the homeowner will make the

mortgage payment.

The assistance will be the lower of:

1. Payment standard minus the Total Tenant

Payment, or

2. Monthly Homeownership expenses minus

Total Tenant Payment.

15. How is my monthly payment calculated?

Depending on the total homeownership expenses, the

monthly payment is typically 30% - 40% of adjusted

gross income.

16. Who do I contact for more information?

Sarah Johnson, Occupancy Specialist

Housing Choice Voucher Program

MaineHousing

26 Edison Dr.

Augusta, ME 04330

(207)624-5777

1-866-357-4853 Ext. 5777