Understanding Popular HUD Assistance

A lot of people have a hard time keeping up with their housing expenses. A good rule of thumb is to keep housing expenses no more than 30% of your gross income every month if you want your expenses to be considered affordable, according to the definition from the United States Department of Housing and Urban Development (HUD). However, that can be difficult for a lot of households to achieve. Luckily, HUD has housing assistance opportunities available. Besides having housing support options for people to help them achieve affordable housing, they also have support opportunities to help people buy or improve their homes. That is why it’s important to review what’s available!

Understanding Popular HUD Assistance

Some popular HUD assistance opportunities include:

Housing Choice Voucher Program

One of the most popular options on this list is the Housing Choice Voucher program, also known as Section 8. This is a program that can give housing vouchers to qualifying recipients. These vouchers can be used to pay for a portion of the housing expenses that recipients deal with. Recipients can choose the place that they want to live in. However, they can only choose properties that accept these vouchers as a form of payment. The properties must also meet local PHA requirements which include passing an inspection!

This program is available thanks to HUD, but it is administered at the local level by public housing authorities (PHAs). PHAs receive HUD funding, but they are the ones that manage the program. It’s important to note that specific eligibility requirements can vary depending on the location. However, there are typically four factors that are important to PHA consideration. These four factors include:

  • Citizenship Status
  • Income Level
  • Family Status
  • Eviction/Criminal History

If you want to get more information or begin the application process, you can get in touch with your local PHA. Those that need even further assistance can reach out to their local HUD Field Office.

Public Housing

Another popular HUD housing support opportunity is Public Housing. The goal of this program is to provide safe and decent rental housing to qualifying families at a rate they can afford. The types of homes that are a part of this program aren’t just apartments. For example, public housing can also come in the form of a single-family home. Even though this is a HUD program, it is managed at the local level by housing agencies (HAs). Specific eligibility criteria will vary. However, they will determine who qualifies based on the following conditions:

  • Income Level
  • Family Status
  • Citizenship Status
  • References

Even though references don’t go into determining whether or not a person qualifies, it is still important to keep this factor in mind. That’s because even individuals who qualify based on income level, family status, and citizenship status can still not be eligible for this program if their references don’t check out. References are meant to help the local HA determine if recipients will be good tenants and neighbors. If you want to begin the application process, you will want to get in touch with your local HA. People that need more assistance can reach out to their HUD Field Office.

FHA Loans

The Federal Housing Administration (FHA) is a part of the HUD. They insure loans that approved banks and other lenders provide. By ensuring these loans, the FHA reduces the risk that lenders face. That’s because the FHA will protect lenders against losses by paying a claim to the lender for the unpaid principal balance of a loan if a person defaults on their mortgage. Some of the benefits of these loans are that they have lower down payment requirements and allow applicants to have a lower credit score than a lot of conventional loans. Besides a standard mortgage, there are some other types of FHA mortgages that people may not know exist! Some of these loan types include:

  • Home Equity Conversion Mortgage (HECM): HECM is a type of reverse mortgage designed for individuals at least 62 years old. Recipients of this mortgage can turn their home equity into cash while keeping the title of the home.
  • 203(k) Improvement Loan: This home loan comes along with extra funds. The extra funds can go towards handling the cost of renovations and repairs to the property.
  • Energy Efficient Mortgage: This is also a home loan that comes along with extra funds. The extra funds can go towards upgrading homes to become more energy efficient.
  • Section 245(a) Loan: When applicants expect their income to increase, they may benefit from this home loan option. The mortgage starts at a lower monthly payment but increases over time.

HUD Homes for Sale

Residential properties that belong to HUD are available for sale at a discounted rate. They belong to HUD because they are a result of a foreclosure on a mortgage that was insured by the FHA. HUD will offer the foreclosed properties for sale in an attempt to recover the loss that came along with the foreclosure. If you are interested in reviewing these discounted properties you will need to check out the HUD Home Store. However, there is a specific process when it comes to buying these types of properties. Only government-registered brokers can sell them. The HUD Home Store is not only a great place to review homes but also learn more information on what it means to handle the home buying process with these types of properties.

Housing Opportunities for Persons with AIDS (HOPWA)

Different people have different sets of challenges they face. That is why the government has HOPWA. This program can help qualifying people that have HIV/AIDS get housing. The program can do this by providing grants to various sources like nonprofit organizations, local communities, states, and more. There are two grants that sources can benefit from which are:

  • Formula Grants
  • Competitive Grants

The funds that sources receive can help individuals through housing support, social services, and more. While qualifying individuals (and their families) cannot benefit from HOPWA directly, they can benefit from HOPWA-funded opportunities available in their community.

Good Neighbor Next Door (GNND) Program

Another home buying opportunity on this list is the GNND program. This program offers a 50% discount on the listing price of a home for eligible recipients. To benefit from this opportunity, recipients must have a qualifying profession. An eligible profession is one of the following:

  • Teachers (from pre-K to 12th grade)
  • Firefighters
  • Emergency Medical Technicians (EMTs)
  • Law Enforcement Officers

Besides needing to have an eligible job, recipients must also commit to living on the property for a minimum of 36 months with the property being their primary residence. Properties must be located in revitalization areas that are exclusively for sale through this program. If you want to benefit from this opportunity, you will need to check out listings in the state that you live in. Once you find a property you are interested in, you will need to follow the instructions to submit your interest. If the property you are interested in receives more than one submission, then the offer will be sent to an interested person chosen by a random lottery. If chosen, HUD will require the recipient of the property to sign a second mortgage and note for the discount home amount known as a “silent second.” There will not be any payments or interest on this silent second as long as the recipient fulfills the 36-month occupancy requirement.

Bottom Line

Not everyone is dealing with the same situation. That is why the specific housing assistance opportunity that would be best for your situation may not be the same for someone else. Luckily, there are a variety of housing support opportunities available from the United States Department of Housing and Urban Development (HUD). There may be more opportunities than you realize that could be helpful for your situation!

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