Good Nesting
Benefits Assistance

Should You Buy Or Rent With Section 8?

Good Nesting
3 min read

Did you know that the Section 8 housing program gives you the option to rent or buy a home?

We’ll break down why buying may be your better option, provided you qualify.

Would you rather pay rent each month to your landlord or put that cash towards a mortgage that lets you own a home? If you’re like most, you’d probably choose the second option, as it lets you gain the pride of becoming a homeowner while allowing you to build equity that can lead to more financial security in the future.

Unfortunately, many low-income households do not have the option to choose between renting or buying, but Section 8 can give you both. Yes, Section 8 is most famous for its vouchers that help pay the rent, but it can also make you a homeowner if you qualify for the Housing Choice Voucher homeownership program. With it, you can use your voucher towards a mortgage versus paying a landlord.

How To Qualify For The Housing Choice Voucher Homeownership Program

Here are the standard eligibility requirements for the HCV homeownership program. Although some Public Housing Agencies (PHAs) may not offer it, it’s available across the country. Contact yours to see if this is an option in your area. If not, apply to another PHA nearby.

To qualify for the HCV homeownership program, you will have to:

  • Make a minimum income (that your PHA will reveal) to ensure you can pay your part of the mortgage every month.
  • Prove you are a first-time homeowner and haven’t had an ownership interest in a house within the past three years. If someone in your home is disabled, you can bypass this prerequisite.
  • Prove full-time employment (30 weekly hours) for a year. You can bypass this if elderly or disabled.
  • Meet PHA requirements that tend to vary according to location.
  • Take classes on homeownership.
  • Come up with a three percent down payment, with one percent coming from your personal accounts/savings.

Pass those requirements and get a voucher, and you can own a home by paying just 30 percent of your monthly income towards the housing expenses.

The Advantages And Disadvantages Of Buying A Home With Section 8

Advantages:

  • You’ll have better housing options when buying a home versus renting.
  • You may have an easier time buying as some landlords discriminate against Section 8 renters.
  • You can build equity in your home instead of wasting cash on rent.

Disadvantages:

  • As with Section 8 renting, a homeownership voucher can take many years to secure.
  • Even with help from a voucher, you may find it tough to find an affordable home in an expensive housing market.
  • Some lenders will not work with Section 8 homeownership vouchers, so finding a mortgage could be daunting.
  • Vouchers don’t last forever. If you get a 20-year mortgage, the voucher will help for just 15 years. If you get a mortgage shorter than 20 years, the voucher will last 10 years. Once your voucher support ends, you will have to pay the mortgage in full out of your own pocket.

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