Section 8 Homeownership Program Briefing Session

Report
Contact Information
Oklahoma City Housing Authority
1700 Northeast Fourth Street
Oklahoma City, Oklahoma 73117-3800
405-239-7551
Executive Director
Director Leasing/Rental Assistance
Family Self-Sufficiency Coordinator /
Section 8 Homeownership Coordinator
Table of Contents
John H. Johnson
Richard R. Marshall
Ryland R. Moore
Section 8
Homeownership Program
Briefing Session
Table of Contents
Introduction
Table of Contents
Introduction Cont.
Section 8 Programs are funded by the
Department of Housing and Urban
Development (HUD), and administered
by public housing agencies authorized
under federal or state law to operate
housing programs within an area or
jurisdiction.
Table of Contents
Introduction Cont.
Section 8 is a free-choice approach
to assisted housing.
Table of Contents
Introduction Cont.
Instead of the hustle of apartment living
one may prefer the quietness of ...
Table of Contents
Introduction Cont.
… living in a home with a yard of your own.
Table of Contents
Introduction Cont.
A person selected to participate in the
Section 8 Program is issued a Housing
Choice Voucher and is then free to
locate a dwelling unit suitable to the
family's needs and desires in the private
rental market.
Table of Contents
Introduction Cont.
Both options are available under the
Section 8 Program.
Apartment
House
Table of Contents
Introduction Cont.
Once the family selects a unit, OCHA will
inspect the unit before initial leasing and at
least annually thereafter to ensure the unit
meets HUD Housing Quality Standards
(HQS).
Table of Contents
Introduction Cont.
Once the unit passes an HQS inspection,
OCHA will enter into a Housing
Assistant Payment (HAP) Contract with
the Owner who leases the unit to the
family.
Table of Contents
Introduction Cont.
• Thereafter, OCHA pays a portion of the rent or
HAP payment, directly to the owner on behalf
of the family.
• The tenant will pay the remaining portion of the
monthly rent, based on his/her income each
month directly to the owner.
• Under the Housing Choice Voucher Program,
the family is generally required to pay
approximately 30% of adjusted monthly
income toward rent and utilities.
• The HAP payment made by OCHA to the
Owner generally pays the remaining 70% of the
approved contract rent.
Table of Contents
SECTION 8
HOMEOWNERSHIP
PROGRAM (HOP)
OVERVIEW
Table of Contents
Program Overview
• OCHA will assist eligible Section 8 Housing Choice
Voucher Program participants to purchase a home
by offering a Homeownership Assistance Payment
towards a mortgage payment.
• OCHA will offer the HOP to FSS participants first.
OCHA will then offer the HOP to the Section 8
Program participants.
• OCHA will determine who is eligible/ineligible to
participate in the program.
Table of Contents
Program Overview Cont.
• After the family is determined eligible, and has
completed the Homebuyer Education Class, a voucher
on the HOP will be issued.
• The voucher will specify family requirements and the
timeline for all activities to be completed.
• OCHA and partners will assist with steps to secure...
– financing;
– locate a property;
– obtain a home inspection; and
– close.
• Ongoing counseling will be offered as a preventative
measure and as needed.
Table of Contents
Program Overview
Cont.
.
• Participants will be required to continue to meet
eligibility requirements which include:
– annual recertification; and
– annual property inspection.
• OCHA will not provide financial assistance to purchase a
home other than the monthly Homeownership
Assistance Payment.
• OCHA ACCEPTS NO RESPONSIBILITY FOR ANY
FINANCIAL LOSS BY:
– the client;
– lenders; or
– or any other individuals throughout the process.
Table of Contents
Program Overview Cont.
PARTICIPATION DOES
NOT GUARANTEE THE
PURCHASE OF A
HOME.
Table of Contents
PROGRAM
ELIGIBILITY
Table of Contents
The Family May Purchase a Home:
• Anywhere within the Oklahoma City jurisdictional
area.
• The program will be offered to Family SelfSufficiency (FSS) participants first.
• If enough FSS participants are not interested or
eligible, we will then offer the remaining slots to all
other Section 8 Program partipants.
Table of Contents
Requirements
To be eligible you must:
• be a participant of the Section 8 Housing Choice Voucher
Program; and
• participating in the FSS Program; or
• a participant of the Section 8 Housing Choice Voucher Program.
• be eligible to participate in OCHA programs by standard
requirements;
• be in good standing with all programs currently participating in;
• have no outstanding debts to OCHA; and
• possess a satisfactory rental payment history for at least one
year.
Table of Contents
Income
• Must have a minimum gross monthly income of
$5.15 X 2000 hours (except in case of elderly or
disabled person).
• Welfare assistance (except in case of elderly or
disabled) shall not be counted in determining
annual income.
• Welfare assistance shall be counted in determining
annual income for elderly and disabled families;
• Families may be eligible to count the annual HAP
made on their behalf as annual income;
Table of Contents
Income Cont.
125% x Housing Assistance
Payment
Example: Housing Assistance
Payment=$400.00
$400.00 x 12 x 125% = $6,000.00
additional income.
Table of Contents
Pre-credit Screening:
• You must pass a preliminary credit screening
process; and
• You must obtain Certification of completing
a Homebuyer Education Class.
Verifications
Employment will be verified and cannot be
more than 30 days old.
Table of Contents
To qualify as a “first-time homebuyer”
the assisted family may not include:
• any person who has owned interest in part or
whole of a residence three years prior to
commencement of homeownership assistance, or
• one who currently owns title or cooperative
membership shares.
A “First-Time Homebuyer” is:
A family that moves for the first time from rental
housing to a family-owned home.
Table of Contents
Program Eligibility
• To purchase the home an adult member
must be employed at least 30 hours per
week and been working at least 30 hours
per week for the past twelve (12) months.
NOTE: Employment does not have to be with
the same company but neither can there be more
than a thirty (30) day break in hours worked.
Employment requirements do not apply to the
elderly or disabled.
Table of Contents
Homeownership Voucher
• After eligibility is determined a family will have
120 days to:
– secure financing;
– close; and
– relocate to new home.
• If family misses the 120 day deadline:
– an extension may be requested and is subject to
review and must be requested prior to deadline.
OR
– a rental voucher may be issued.
Table of Contents
Financing
•
•
OCHA will assist the HOP participant in:
–Application submission to the Lender;
–Selecting a lender; and
–Referrals to appropriate agencies.
Participants may use any FSS Escrow funds
accumulated without penalties;
•
Participants are required to pay at least 3% down. At
least 1% of the 3% must come from the participant’s
personal resources;
•
Participant is required to obtain all financing for the
home;
Table of Contents
Financing Cont.
• OCHA will make referrals to
appropriate agencies for additional
financial assistance;
• Financing of the home must be
provided, insured or guaranteed by
the state or federal government;
• Financing of the home must comply
with secondary market underwriting
requirements; or
Table of Contents
Financing Cont.
• Financing of the home must comply with
generally accepted private sector
underwriting standards;
• OCHA will not be responsible for any
financing or become a cosigner for any
purchases;
• “Balloon” payments are not acceptable;
• Variable interest rates are not acceptable;
Table of Contents
Financing Cont.
• Participants are responsible for payment of
all services required for securing financing
and actual purchase;
• Lease purchase agreements are acceptable;
HOWEVER,
• All and any additional payments or charges
in establishing or maintaining agreement
will be the responsibility of the family.
Table of Contents
Eligible Units for Purchase
• All properties must pass an HQS inspection;
• All properties must pass a professional inspection
selected by the family;
• OCHA may refuse the property based on the results of
each inspection;
• All properties purchased must be either a single family
unit, condominium or mobile home;
• Can be a unit under construction or already existing at
the time the family becomes eligible for homeownership
assistance; and
• Must meet lender requirements and specifications.
Table of Contents
Contract of Sale
Before homeownership assistance
can begin, the family must enter
into a “Contract of Sale”. A copy
must be provided to OCHA.
Table of Contents
Contract of Sale Requirements
• Must meet lender requirements;
• Must specify price and other terms of sale;
• Must specify purchaser will arrange for pre-purchase
inspection;
• Must specify purchaser will not be obligated to purchase
the unit unless inspection is satisfactory to purchaser and
OCHA;
• Must specify purchaser is not obligated to pay for any
necessary repairs;
• Must contain certification that the seller has not been
debarred, suspended or denied participation.
Table of Contents
Monthly Homeownership Assistance Payments
• Will be made only as the family occupies the property
and complies with all Section 8 program
requirements; and
• All payments will be made to the lender;
Homeownership Payments shall be the lower of:
• The Payment Standard minus the Total Tenant
Payment (TTP); or
• Family’s monthly homeownership expenses minus the
TTP.
Table of Contents
Payment Standard
• The payment standard is the amount used to calculate
the housing assistance a family will receive in the
OCHA’s Rental Voucher Program;
• OCHA’s payment standard will be set between 90-110%
of the applicable Fair Market Rent (FMR);
• The payment standard will be established by unit size;
• Persons with disabilities requesting a reasonable
accommodation to have the payment standard exceed
110% of FMR will require approval from the local HUD
office;
Table of Contents
Payment Standard Cont.
Examples:
• Payment Standard minus the Total Tenant
Payment (TTP)
$714.00 - $406.00 = $308.00
• Family’s monthly homeownership expenses
minus the TTP
$814.00 - $406.00 = $406.00
Table of Contents
Monthly Homeownership Assistance Payments
“Homeownership Expenses”
•
•
•
•
•
•
Principal and interest;
Mortgage insurance;
Homeownership Insurance;
Property Taxes;
Cooperative or condominium operating fees; and
Expenses for reasonable accommodations to elderly
and disabled
Table of Contents
Monthly Homeownership Assistance Payments
“Annual Recertification”
• Annual recertification of the family composition and
income will remain a requirement;
• Passing an annual HQS Inspection of the property will
remain a requirement.
• Any repairs to be completed for HQS will be the
responsibility of the family.
• If the family fails to fulfill annual reexamination
requirements or the property fails to pass HQS upon reinspection, all homeownership assistance will be
discontinued with a thirty-day notice to the family; and
Table of Contents
Monthly Homeownership Assistance Payments
“Annual Recertification Cont.”
• The family will be removed from all other Section 8
Programs.
• All income eligibility and family composition
requirements under the Section 8 Rental Assistance
Program apply to the Section 8 Homeownership
Program.
Table of Contents
Monthly Homeownership Assistance
Payments Cont.
• Homeownership Assistance Payments
automatically stop 180 calendar days after
30% of the family’s adjusted gross income
equals or exceeds the Payment Standard for
which they are certified.
Table of Contents
Maximum Term for
Homeownership Assistance
• Homeownership Assistance Payments will continue as
long as the family and property continue to meet
program requirements but cannot exceed the
following…
–If mortgage is 20 years or longer, initial mortgage
assistance will continue for 15 years from the date of
commencement of homeownership assistance
payment.
–All other cases are a maximum of 10 years.
Table of Contents
Maximum Term for Homeownership Assistance Cont.
“Elderly/Disabled”
• Ten and 15-year limitations do not apply to
elderly/disabled;
However,
• If an elderly/disabled family becomes unclassified as
elderly/disabled, maximum limit shall commence from
the date certified to participate with HOP and not from
date of reclassification;.
• Whichever apply, an elderly or disabled family shall be
provided at least 6 months of homeownership assistance.
Table of Contents
The length of homeownership
assistance is cumulative
regardless of the number of
homes or jurisdictions.
Table of Contents
Family Obligations
• Homeownership assistance payments may be
paid only while the family is residing in the
home.
• If the family moves out of the home, OCHA will
discontinue payments after the month the family
moved out. OCHA will not seek reimbursement
for this monthly payment.
Table of Contents
Family Obligations Cont.,
• To continue receiving assistance the following
obligations must be complied with:
– All income and family composition changes must be
reported;
– All additional homeownership and housing
counseling necessary must be completed;
– All mortgage terms must be complied with including
the refinancing of any debt;
– The family must live in the unit while receiving
assistance;
– All family members to reside in the home must be
approved by OCHA;
Table of Contents
Family Obligations Cont.,
– Prior authorization by OCHA must be granted to the
family to finance the purchase of the home including
refinancing;
– In the event of the death of a family member who
holds, in whole or part, title to the home or ownership
of cooperative shares, homeownership assistance may
continue pending settlement so long as the home is
occupied solely by the remaining family members;
– All repairs are to be made by the family to the dwelling
unit to meet minimum HQS standards; and
– All requested information must be supplied to OCHA
within specified time frames.
Table of Contents
Family Obligations Cont.,
• All information requested by HUD or OCHA must be
supplied and could include:
1. Mortgage or debt incurred to purchase the home.
2. Documentation regarding refinancing of the debt.
3. Information regarding whether the family has
defaulted on the debt.
4. The nature of any such default;
5. The satisfaction of payment of the mortgage debt;
6. Any sale or transfer of any interest in the home; or
7. The family’s homeownership expenses.
Table of Contents
Family Obligations Cont.
• The family must notify OCHA 30 days prior to moving
out of the home;
• The family must notify OCHA if the family defaults on
the mortgage;
• While receiving homeownership assistance no family
member may have any ownership interest in other
residential property;
• OCHA may establish additional requirements for
continuation of homeownership assistance; and
• The family must comply with any additional
requirements of the program.
Table of Contents
Portability
• Individuals eligible for homeownership assistance by the
initial PHA may purchase a unit outside the initial PHA’s
jurisdiction if: (1) the receiving PHA is administering
the program; and (2) is accepting new homeownership
families.
• Participants are eligible to move with either (1) TenantBased Rental Assistance; or (2) Homeownership
Assistance.
However,
• with Tenant-Based Rental Assistance all Housing Choice
Voucher requirements must be met.
Table of Contents
Portability Cont.
• In addition, no rental assistance payments may be
made on the new rental as long as the family still
holds interest (name on title) in any other property;
and
• To move with continued assistance all initial
requirements must be met except: (1) homebuyer
counseling; and (2) first-time homebuyer
requirement.
Table of Contents
Denial Or Termination
Homeownership and Rental Assistance will be terminated for a
family in accordance with:
•24 CFR 982.552 (Grounds for Denial or Termination of
Assistance);
•24 CFR 982.553 (Crime by Family Members);
•24 CFR 982.551 and 24 CFR 982.633 (Failure to comply with
family obligations); or
•any family member by order of foreclosure.
However,
OCHA may issue a Housing Choice Voucher to the family if the title
to the home has been transmitted as required by HUD to HUD or
HUD’s designee and the family has moved from the home within the
period established by HUD.
Table of Contents
Recapture Of Homeownership Assistance
• Upon sale or refinancing of the home OCHA shall
recapture a percentage of the homeownership
assistance provided to the family( cash-out);
• Upon purchase of the home documentation shall be
required consistent with State and local law securing
OCHA’s right to recapture of homeownership
assistance;
• The lien securing the recapture of homeownership
subsidy may be subordinated or subject to a refinanced
mortgage; and
Table of Contents
Recapture Of Homeownership
Assistance When SELLING The Home
• If the home is sold the recapture shall be:
– An amount equaling the lesser of the amount of
homeownership assistance provided to the family; or
– The difference between the sale price and purchase price of
the home minus the cost of any capital expenditures, the cost
incurred by the family in selling the house (sales commission
and closing costs); or
– The amount of the difference between the sale price and
purchase price that is being used , upon sale towards the
purchase of a new home under the HOP.
Table of Contents
Recapture Of Homeownership
Assistance When REFINANCING
• When refinancing the home, the capture shall be the
amount equaling the lesser of the amount of
homeownership assistance provided to the family; or
• The difference between the current mortgage debt and
the new mortgage debt minus the costs of any capital
expenditures; or
• The cost incurred by the family in the refinancing of the
home (such as closing cost. Any amounts that have been
previously recaptured as a result of refinancing.
Table of Contents
Homeownership is not just a
dream,
but a dream come true.
Table of Contents
RESTART
Table of Contents
• Introduction: Slides 2 thru 12
• Homeownership Program
Overview: 13 thru 17
• Program Eligibility: 18 thru 25
–
–
–
–
–
–
•
•
•
•
Requirements: 19 thru 20
Income: 21 thru 22
Pre-credit Screening: 23
Verifications: 23
First-time Buyers: 24
Employment Eligibility: 25
Homeownership Voucher: 26
Financing: 27 thru 30
Eligible Units for Purchase: 31
Contract of Sale Requirements:
32 thru 33
• Monthly Homeownership
Assistance Payments: 34 thru 43
–
–
–
–
Payment Standard: 35 thru 36
Homeownership Expenses: 37
Annual Recertification: 38 thru 39
Assistance Payment Limitations:
40 thru 43
•
•
•
•
Family Obligations: 44 thru 48
Portability: 49 thru 50
Denial or Termination: 51
Recapture of Homeownership
Assistance: 52 thru 54
• Conclusion: 55
• Contact Information: 1
Return to last slide viewed

similar documents