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How the homeownership option works
Instead of paying a landlord, the housing agency pays a monthly homeownership assistance payment toward the family’s housing costs—usually sent to the lender or directly to the family, depending on agency policy. The family pays the rest of the mortgage and ownership costs from its own income.
The program is part of the Housing Choice Voucher program, so you must already be (or become) a voucher participant.
Who qualifies
A family must meet all of these HUD minimums. Agencies can add other requirements (and a higher minimum income), but they cannot add employment requirements beyond HUD’s:
| Requirement | HUD minimum |
|---|---|
| Voucher status | Admitted to the Housing Choice Voucher program |
| First-time homeowner | No household member owned a home in the past three years (with exceptions for displaced homemakers, single parents, and cooperative members), or homeownership is needed as a disability accommodation |
| Minimum income | For most families: federal minimum wage × 2,000 hours ($14,500). For disabled families: monthly federal SSI benefit × 12. Welfare assistance doesn’t count for non-elderly, non-disabled families |
| Employment | An adult owner has been continuously employed full time (at least 30 hours per week) for at least one year, with brief breaks allowed. Does not apply to elderly or disabled families |
| Prior default | No prior mortgage default under the homeownership option |
| Counseling | Complete the agency’s required pre-purchase homeownership counseling |
Many agencies also require participation in Family Self-Sufficiency, a minimum time on the voucher program, or a down payment—commonly at least 3% of the price, with at least 1% from the family’s own resources. If a disability prevents meeting the employment requirement in a non-elderly, non-disabled family, the agency must grant an exemption when needed as a reasonable accommodation.
How the monthly payment is calculated
The monthly homeownership assistance payment is the lower of:
- The payment standard for the family minus the family’s total tenant payment, or
- The family’s monthly homeownership expenses minus the total tenant payment.
Homeownership expenses include principal and interest, property taxes, homeowners insurance, mortgage insurance, a utility allowance, an allowance for routine maintenance and major repairs, and certain association fees. The agency sets allowances under its policy.
Example: A family’s TTP is $600. The payment standard is $1,500. Monthly homeownership expenses are $1,650. Assistance = the lower of ($1,500 − $600 = $900) or ($1,650 − $600 = $1,050) = $900. The family pays the remaining $750 of expenses.
Time limits
- 15 years of assistance if the initial mortgage term is 20 years or longer
- 10 years in all other cases
- No time limit for elderly families (if elderly when assistance begins) and disabled families
Finding and buying the home
- Get pre-approved with a lender that accepts voucher homeownership assistance as income. Many buyers use FHA, USDA, state housing finance agency, or community lender products. Some lenders count the assistance as income; others subtract it from the payment.
- Search within the agency’s rules. The home usually must be in the agency’s jurisdiction unless portability is allowed.
- Sign a contract of sale that allows the agency to inspect and lets you cancel if the home fails inspection or financing falls through.
- Pass two inspections: the agency’s inspection and an independent professional inspection paid for by the family (or as the agency arranges).
- Agency review of financing. Agencies can prohibit balloon payments, variable-rate loans with risky terms, and seller financing without review.
- Close. The agency begins monthly payments after closing.
Ongoing obligations
- Live in the home as your principal residence
- Keep paying your share of expenses and the mortgage
- Complete annual income reexaminations
- Attend any post-purchase counseling required
- Notify the agency before refinancing, selling, or if you face default
Pros and cons
Advantages: build equity, stable housing costs, freedom from landlord decisions, and the ability to stay in the home after assistance ends if you can afford it.
Risks: you are responsible for repairs, tax and insurance increases, and possible foreclosure. When the time limit ends, you pay the full cost. Budget carefully using our true cost of homeownership checklist.
Getting started
- Ask your caseworker: “Does the agency offer the Housing Choice Voucher homeownership option? What are the requirements and is there a waitlist?”
- Contact a HUD-approved housing counselor for credit and budget preparation.
- Look into first-time homebuyer assistance and down payment programs you can combine with the voucher.
Frequently asked questions
Does every housing authority offer Section 8 homeownership?
No. The homeownership option is optional for agencies. Federal rules say an agency must offer it when necessary as a reasonable accommodation for a person with a disability, but an agency that has chosen not to run a homeownership program may decide that doing so would not be reasonable. Ask your agency whether it runs a program and whether there is a waiting list or FSS requirement.
How much income do I need?
HUD’s floor is the federal minimum wage times 2,000 hours ($14,500 a year at $7.25/hour) for most families, or 12 times the monthly federal SSI benefit for disabled families. For most families, welfare assistance doesn’t count toward that minimum. Agencies can set higher minimums, and lenders will apply their own underwriting.
Can I use my voucher for a down payment instead?
Federal rules allow agencies to offer a one-time down payment assistance grant instead of monthly payments, but only if HUD has funded that option; in practice very few agencies offer it. Monthly homeownership assistance is far more common.
What happens if I can’t pay my mortgage?
Contact your lender and a HUD-approved housing counselor immediately. A family that defaults on a mortgage under the homeownership option generally cannot receive homeownership assistance again, though the agency may allow the family to return to rental assistance under its policy.
Can I buy a manufactured home or condo?
Yes. Eligible units include single-family homes, condominiums, cooperative shares, and manufactured homes (including those on leased pads). The home must pass inspection and an independent professional inspection.
Sources and verification
Use these sources to check program rules. Funding, openings, and local procedures must be confirmed with the agency handling your application.
- Housing Choice Voucher homeownershipU.S. Department of Housing and Urban Development
- 24 CFR 982.627 — Homeownership option: Eligibility requirements for familiesElectronic Code of Federal Regulations
- 24 CFR 982.634 — Homeownership option: Maximum term of homeownership assistanceElectronic Code of Federal Regulations
- Find a HUD-approved housing counselorU.S. Department of Housing and Urban Development
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