Can a Section 8 voucher help you buy a house? The homeownership option explained

Most voucher holders never hear this

The Housing Choice Voucher program is best known for helping families pay rent each month. But HUD rules also allow the voucher to go toward monthly homeownership expenses, not just rent. This program is called the Housing Choice Voucher homeownership option. It was created to give long-term voucher holders another path toward stability.

The reason most people have not heard of it is simple. Not every public housing agency (PHA) offers it. PHAs have the choice of whether to run the program, so availability depends on where you live. Even PHAs that do offer the option often do not bring it up on their own. If that option was not mentioned when you received your voucher, you can still ask about it. Many families who could meet the requirements never find out the option exists.

Three things to know right away

Why don't all PHAs offer it? Why it is not everywhere: HUD gives each local public housing agency (PHA) the choice of whether to offer the homeownership option. That makes the program optional for PHAs. A PHA that has not set up the option cannot issue a voucher for a home purchase. This is true regardless of how long a family has held the voucher.

How does the homeownership option work? How it works: When a PHA does offer the option, the voucher helps pay monthly homeownership expenses instead of rent. HUD rules require families to meet a first-time homebuyer definition, a minimum income requirement, and an employment requirement. There are exceptions to the employment requirement for elderly and disabled families. A family must complete homeownership counseling from an agency the PHA accepts before a purchase can move forward.

Where do I ask? Where to ask: Your local public housing agency (PHA) manages your voucher. Only the PHA can tell you whether this option is available in your area. Ask in writing — a letter or email — and keep a clear record of the answer.

How to move from asking to buying

The path from your first question to a home purchase involves several steps. Each step depends on what your PHA offers and what requirements you meet. No website can tell you the result in advance — only the PHA decides.

If you want to explore this option, work through these steps:

• Contact your PHA in writing. Ask whether the Housing Choice Voucher homeownership option is available. Request a copy of the written rules and any application forms. Keep copies of all messages you send and receive.
• Review the requirements the PHA gives you. You will need to meet the first-time homebuyer definition the PHA uses. You must also meet a minimum income level and an employment requirement. Income limits vary by area and family size, so check the current limits directly with your PHA.
• Complete the required counseling. HUD rules require homeownership counseling before you can use a voucher toward a purchase. Ask the PHA for a list of counseling agencies it accepts. Finishing this step early keeps the process moving.
• Find a home that meets program rules. The home must pass a HUD inspection. Ask the PHA what types of properties are allowed and whether any location limits apply.
• Work with the PHA through closing. After you find a home the PHA has reviewed, the PHA must also review the purchase agreement. Once you close, the voucher helps cover monthly homeownership expenses. It continues as long as you meet program rules.

What questions to bring to your PHA

Write your questions down before you contact the PHA. A written list helps you cover everything in one visit, call, or letter. It also gives you something to check the answers against later.

• Does this PHA offer the Housing Choice Voucher homeownership option?
• What are the income, employment, and first-time homebuyer requirements?
• Which homeownership counseling agencies does the PHA accept?
• What types of homes does the program allow, and are there location limits?
• What does the PHA need to review before and after you find a home?
• If this PHA does not offer the option, can it refer you to a PHA that does?