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Definition of Section 8 Homeownership Program from Mortgage Glossary

Section 8 Homeownership Program - American Dream Commitment Fannie-Mae and Freddie-Mac expand their underwriting requirements necessary for Freddie Mac to purchase mortgages originated under the Section 8 Homeownership Program, and pledge funds in form of Section 8 vouchers, also known as the Housing Assistance Payment (HAP). HAP vouchers allow otherwise non-qualifing hoseholds to qualify for conforming mortgage loans. Households already qualifying for Section 8 Housing (rent) can use for Section 8 homewnership program benefits: With special approval by Freddie Mac of the Section 8 voucher program, 1% or $1000 minimum out-of-pocket contribution from the borrower, depending on the price of the home. Flexible total debt payment-to-income ratio of 38-42% and no housing expense-toincome ratio. Flexibility in use of automated or manual underwriting, depending upon the mortgage product used. Direct deduction of the Housing Assistance Payments (HAPs) from the principal, interest, taxes and insurance (PITI) increases purchasing power. HAP can be made directly from the Section 8 administrator to the mortgage servicer or to the borrower, depending on local needs.   Section 8 Housing The Section 8 program began during the Great Depression to increase the housing choices available to very low-income households by making privately-owned rental housing affordable to them. It provides rent subsidies, either rental certificates or vouchers, on behalf of eligible tenants. Who Qualify? In the Section 8 Program, qualifued low-income tenants pay about 30 percent of their income for rent, while the rest of the rent is paid with federal money. The housing authorities pay the difference between Fair Market Rent (FMR) and what the tennants pay. The FMR, in turn, is determined by the United States Department of Housing and Urban Development (HUD). 2005 Section 8 income limits for NY Household Size Income Limits 1 Person $35,150 2 People $40,200 3 People $45,200 4 People $50,250 5 People $54,250 6 People $58,300 7 People $62,300 8 People $66,300 See your local Housing Authority web site for limits in you area - for instance - limits for Santa Clara, CA				You'll be re-directed to Loan Savings Solution Web Site
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