Housing is getting harder and harder to keep up with for plenty of Americans. That is why it is important to know that there is a variety of support available. There may be more than you realize! That’s why we want to highlight different types of housing assistance that may be able to help your current situation in this article. Hopefully, this information can point you in the right direction!
What are Some Different Types of Housing Assistance?
There are a variety of specific programs out there that are designed to help with housing. However, you can break it down into three general categories:
- Rental Assistance
- Home Financing Assistance
- Down Payment Assistance
Rental Assistance
Not everyone is in the position to buy a home. Buying a home may also not be the goal for everyone, either! That is why rental assistance is such an important housing support opportunity. There are a variety of options to consider when it comes to rental housing. Two popular options that you can consider are:
Housing Choice Voucher Program (Section 8)
A super popular housing support opportunity in America is the Housing Choice Voucher Program. However, many people know this program by the name of Section 8 housing. The goal of this program is to provide affordable housing to qualifying recipients. Even though this program is available thanks to the United States Department of Housing and Urban Development (HUD), it is managed at the local level. The local managing/administrative agencies are the local Public Housing Authorities (PHAs).
If an applicant qualifies for the program they will likely be placed on a waitlist. That’s because there are so many people in need of this support opportunity but not enough support to help everyone at the same time. Once it is time for the approved applicant to receive the support, they will get a housing voucher.
The voucher can be used towards covering the cost of housing expenses in the private market. The local PHA would pay the voucher amount to the landlord. However, not every property in the private market allows these vouchers to be used as a form of payment. Even the ones that do cannot just take voucher holders as tenants without following the proper protocol. This protocol includes passing an inspection that the local PHA conducts. If you want to get more information on this program or want to begin the application process, then you will need to get in touch with your local PHA. If you are finding that you could use further help, then you can reach out to your closest HUD Field Office.
Public Housing
Another popular rental assistance opportunity for Americans is Public Housing. Just like Section 8 housing, this program is available thanks to the HUD. However, it is managed at the local level. The managing/administrative agencies at the local level are Housing Agencies (HAs). This housing assistance option gives housing units that are owned by the government to recipients with rent that they can afford. That means the local HA would be your landlord! When most people think of Public Housing, the form of housing that typically comes to mind is apartment complexes. However, Public Housing can come in other forms as well! For example, you can find Public Housing in the form of a single-family home.
The amount of rent that recipients pay will be determined by factors like their gross annual income. Rent is known as the Total Tenant Payment (TTP) under this program. Just like Section 8 housing, applicants that are approved will likely be placed on a waitlist before they can receive support. For more information or to begin the application process, you will want to get in touch with your local HA. If you need further help you can reach out to your local HUD Field Office.
Home Financing Assistance
A lot of people can have a hard time financing the cost of buying a home. That is why it is important to consider this type of housing assistance. Two popular supportive opportunities that can benefit people include:
Federal Housing Administration (FHA) Home Loans
The FHA is not the agency that will provide these loans directly. Instead, approved lenders will be the ones to give out these loans. The FHA is just the entity that insures these loans. By ensuring these loans, they can lower the risk that the lender faces. That is why the eligibility requirements for these loans can be more flexible. They allow lower down payments and lower credit score eligibility. People that have credit scores of at least 580 will be able to provide a down payment as low as 3.5%. However, even people with scores lower than 580 of 500 to 579 will still qualify. They will just need to provide a down payment of at least 10%.
There are a variety of different FHA loans besides the conventional option that most people are familiar with. Some common types of FHA loans include:
- Section 245(a) Loans
- Home Equity Conversion Mortgages
- Energy Efficient Mortgages
- 203(k) Home Improvement Loans
Section 245(a) Loans
These types of mortgages start with a low monthly payment. However, that monthly payment will increase over time. This is a great option for people who expect their income to grow. Specifically, one benefit of this mortgage is the fact that it shortens the overall terms of the loan.
Home Equity Conversion Mortgages
Not every homeowner will have the same mortgage opportunities available to them. This mortgage is a great example of that. Home Equity Conversion Mortgages (HECMs) are a type of reverse mortgage. Since it is a reverse mortgage, it is only available to senior homeowners. A senior homeowner would be someone that is at least 62 years old. Qualifying homeowners will be able to tap into the equity of their homes to get funds. How they choose to receive the funds will vary but they can choose the form of monthly payments, a credit line, and more!
Energy Efficient Mortgages
This type of mortgage comes with extra money for the homeowner to use. However, the extra funds must be used towards dealing with energy-efficient expenses. This includes energy-efficient home improvement costs. The benefit of making your home more energy-efficient is the fact that it allows homeowners to get the chance to lower their energy bills!
203(k) Home Improvement Loans
Last but not least on this list of different types of FHA home loans is a 203(k) Home Improvement Loan. This loan also comes along with extra money for the homeowners to use. However, the additional funds will need to be used on handling housing expenses like home improvement costs, renovation costs, home repair costs, etc.
Veterans Affairs (VA) Home Loans
The United States Department of Veterans Affairs (VA) offers this home loan opportunity. However, only qualifying individuals will be eligible to benefit from this support. The benefit of this loan opportunity is that there is the chance to finance a home with no private mortgage insurance (PMI) requirement, no down payment requirement, as well as forgiving credit score minimum requirements. It’s important to note that the exact terms of the loan will vary by lender and applicant.
The way that a VA loan works are very similar to a conventional mortgage. However, there are some rules in place that are important to keep in mind. This includes the following:
- There is a VA funding fee
- The lender cannot charge more than 1% on closing costs
- There are no VA loan limits
We know we may sound like a broken record but the specific options, rules, and guidelines will vary by lender. For example, even though there is no VA loan limit, an approved VA loan lender may set their loan limit.
Down Payment Assistance
Besides being able to finance your home, you will need to worry about being able to provide a down payment. That is why there are a variety of down payment assistance options to consider. However, one particularly helpful option is the Chenoa Fund. This is a type of down payment assistance program that is available nationwide. The amount of down payment assistance that this program can provide is at most 3.5% of the property’s purchase price.
However, it’s not a program available through the federal government. Instead, it’s an option from the CBC Mortgage Agency. The CBC Mortgage Agency is a federally chartered government entity. The goal of this agency is to improve the sustainability of homeownership while also improving affordability. This agency does have a special focus on certain groups of people like those that have a hard time with their income or credit. However, even people who do not deal with those struggles may still benefit from this opportunity. Recipients will need to meet the minimum requirements to be eligible.
Who is Eligible for the Chenoa Fund?
The minimum requirements will vary depending on the type of home loan that the applicant has. For example, the minimum requirements for someone with an FHA home loan will be different from the minimum requirements of someone that has a conventional home loan. The minimum requirements for an FHA loan are:
- Have a debt-to-income ratio of no more than 45%
- Have a minimum FICO credit score of 620
On the other hand, the minimum requirements for someone with a conventional mortgage would be:
- Have a debt-to-income ratio of no more than 50%
- Have a minimum FICO credit score of at least 640
- Not have an interest rate be more than 2% on a person’s first mortgage
- Have a second mortgage term of a decade (10 years)
If a person qualifies to receive Chenoa Fund assistance, then their down payment will come in the form of a repayable or forgivable second mortgage option.
Resources for Housing Assistance
Besides reviewing the different types of housing assistance that were listed above, you may also be able to benefit from checking out some different resources. Some popular resources that can help people looking for housing assistance include:
Benefits.Gov
If you want to review different government assistance opportunities then this should be one of the first places you review. This informational government website contains details about over 1,000 programs! Besides being able to look for programs by agency or category, there are website tools that can help. This includes a tool known as the Benefit Finder Tool. This is a tool that gives users the chance to provide details about their current situation. This includes information like:
- Date of Birth
- Citizenship Status
- Residency Information
- Household Information
- Income Information
- Employment Status
- Marital Status
- Disability Status
The more information that the user provides then the better results that they will get. The results of this tool will show users what may be a good assistance option for their current situation. While the tool cannot guarantee that the user will be able to qualify for the results they show, it can point them in the right direction. It’s important to keep in mind that the only true way to confirm eligibility is by applying to the program of interest.
211.Org
Besides benefits.gov, another supportive resource is 211.org. This website gives users the chance to check out local assistance information. While it contains information about a wide variety of programs, it does offer a specific focus on helping people with housing expenses. This website can help users find support options for whatever housing focus they need assistance for whether it be their utility bills, rent payments, mortgage payments, etc. Even though many people may not realize this resource exists, it supported 4.3 million connections that were able to prevent and reduce housing insecurity and homelessness for users that got in touch with staff.
Bottom Line
When you find yourself in need of housing support, there are more options than you may think. The right housing support option will vary depending on your goals. That is why it can help to review different types of housing assistance. Three different types of housing assistance include:
- Rental Assistance
- Home Financing Assistance
- Down Payment Assistance
You may also be able to benefit from checking out resources that can provide information about housing assistance. Some resources to consider include:
- Benefits.gov
- 211.org
You may have more support opportunities for your current situation than you realize. You just need to know what’s out there (or where to look for more help!)
