Section 8 Housing Choice Voucher Homeownership Program
Overview
Program Overview
The Section 8 Housing Choice
Voucher Homeownership Program offers
home loans at below-market interest
rates to Section 8 tenants who wish
to purchase their own homes. This
program allows eligible borrowers to
use their Section 8 Housing Choice
Vouchers towards a monthly mortgage
payment.
CHFA is committed to helping
Connecticut residents achieve their
dream of homeownership and values
its partnership with local Public
Housing Authorities (PHAs) across
Connecticut as well as the qualified
lender for this program. Applicants
interested in the Section 8 Housing
Choice Voucher Homeownership Program
should contact their PHA directly
(See,
State List of PHAs.) They may
also contact the
McCue Mortgage Company directly.
Follow the links below for more information regarding the
Homebuyer Mortgage Program.
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Section 8 Housing Choice Voucher
Homeownership Program Interest Rates
Currently, the Section 8 Housing
Choice Voucher Homeownership Program is providing mortgages at the
following rate:
- Interest rate: 3.875%** (APR range 3.975 - 4.375%)
- Fees: Up to One Point (1% Origination Fee) * Payable to Lender
- Term: 30 years, fixed rate
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** Please note, this rate is subject
to change and additional fees may apply.
Who can
apply for a Section 8 Housing Choice
Voucher Homeownership Program
loan?
- Applicants must be
referred by their Public Housing
Authority (PHA)
Eligible borrowers under this
program are Section 8 voucher
holders who have been approved
by their local Public Housing
Authority (see,
state list of PHAs) to
participate in this program.
This approval process includes
assessments by counseling and
credit services that will
determine whether applicants are
ready to purchase a home.
- Applicants must be first-time homebuyers or
prior homeowners purchasing in targeted areas of the
state.
Eligible borrowers must be first-time homebuyers or
cooperative members who meet minimum credit, income and
employment standards. In addition, people who have
owned homes before may also qualify for a loan under
this program if they plan to purchase a home located in
one of 18 designated areas in Connecticut targeted for
revitalization. (See,
Targeted Areas.)
- Who are considered first-time homebuyers?
First-time homebuyers are those who have never purchased
a home before or have not had an ownership interest in a
principal residence for the past three years.
- What are the income guidelines to qualify for this loan?
An applicant’s annual, before-tax household income must
not exceed $81,000 for households of one or two persons or
$93,150 for households of three or more. Household income
is calculated by combining the income of all resident adults, 18 or older, who are not full time students.
The CHFA income limits do not apply
for homes purchased in
targeted areas, unless the applicant
also utilizes the
Downpayment Assistance
Program.
What
types of property can you purchase
with a Section 8 Housing Choice
Voucher Homeownership Program
loan?
The Section 8 Housing Choice
Voucher Homeownership Program
requires that loan applicants
purchase homes that meet specific
property and sales price
guidelines.
- Property Guidelines:
In order to qualify for this program, the applicant must use the loan
to purchase a home in which he
or she will reside year-round.
The applicant may not use the
loan to purchase recreational,
vacation, investment, commercial
or rental properties. No part of
the purchased property may be
designed for commercial
purposes.
In addition, the property
must meet one of the definitions
listed below:
- Existing and new
single-family homes,
townhouses and Planned Unit
Developments
- Newly constructed homes
that meet FHA’s energy
efficiency standards (Ask
your Participating Lender
for more information.)
- Condominiums listed on
the
CHFA-approved Condominium
List
- Two- to four-family
homes that have been used as
residences for the past five
years or newly constructed,
two-family homes in a
Targeted Area
- Mobile homes that meet
FHA
guidelines.
- Sales Price Guidelines:
In order to qualify for this
program, the purchase price of a
home must not exceed the CHFA
sales price limit established
for the specific city or town in
the state where the property is
located. (See, the
CHFA sales price limits.)
What else should you know about
a Section 8 Housing Choice Voucher
Homeownership Program loan?
The following additional considerations
and restrictions apply to Section 8
Housing Choice Voucher Homeownership
Program loans.
- You may qualify for
help with your down payment and
closing costs.
For those who lack sufficient
funds to cover the upfront
expenses associated with
purchasing a home, CHFA offers
assistance to qualified
borrowers through the
Downpayment Assistance Program
(DAP).
Borrowers under the
Section 8 Housing Choice Voucher
Homeownership Program may
qualify for a reduced interest
rate on a DAP loan.
Please note: A
down payment of at least 3.5 %
of the purchase price of the
home is typically required by
the mortgage insurer.
- Mortgage insurance
may be required.
A Section 8 Housing Choice
Voucher Homeownership loan may
be insured either through the
Federal Housing Administration (FHA), the
Veterans Administration,
the
USDA Rural Development or
through private mortgage
insurance (PMI).
(Your Participating Lender can
provide more detailed
information on the mortgage
insurance options under this
program.)
- You may be required
to pay a special federal tax if
you sell your home within nine
years.
Under rare circumstances, CHFA
mortgage loans may be subject to
the
Federal Recapture Tax at the
time the property is sold. The
tax might apply if a borrower
sells his or her home within
nine years of the purchase date,
makes a profit on the sale and
has an income that exceeds
federal recapture tax limits at
the time of the sale.
- You will need to
complete a homebuyer education
class.
Prospective borrowers under the
Section 8 Housing Choice Voucher
Homeownership Program are
required to attend a free
three-hour, homebuyer education
class prior to closing the loan.
Classes are held at several
locations in the state each
month. (See,
homebuyer education class
schedule.)
How do you apply for a
Section 8 Housing Choice Voucher
Homeownership Program loan?
Prospective borrowers of the
Section 8 Housing Choice Voucher
Homeownership Program should contact
their local PHA for an initial
assessment of their eligibility and
a determination of the estimated
housing assistance payment they
qualify for. (See,
State List of PHAs.) The PHA
will refer eligible borrowers to the
CHFA-qualified lender,
The McCue Mortgage Company, who
will guide applicants through the
application process.
Generally, the time from applying for
the loan to closing the sale of the property is six to eight
weeks.
Questions? Contact CHFA.
Prospective borrowers should
first contact their PHA or lender for
information on this loan program.
For additional assistance, borrowers
may contact CHFA’s single family
underwriting department.
Mailing Address:
CHFA
Attn: Single Family Underwriting
999 West Street
Rocky Hill, CT 06067-4005
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Documents related to the Section 8
Homeownership Voucher Program
The following documents are
related to the Section 8
Homeownership Voucher Program.
To open and view the document, click
on the document title.
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