PAWTUCKET HOUSING

AUTHORITY

HCV HOMEOWNERSHIP

PROGRAM

GENERAL OVERVIEW

PHA is not required to administer a Homeownership Program;

It is voluntary;

The PHA has made a commitment to educating, enhancing and empowering the lives of the people we serve.

The PHA believes that the Section 8 Homeownership is one of the programs that will allow us to achieve this commitment.

PHA

PRELIMINARY

REQUIREMENTS

Be a participant of the Section 8 Housing Choice

Voucher Program for at least ONE year

Must be a participant in “good standing”:

Do not currently owe money to the PHA under a

repayment agreement and

Have had good rental payment history while on

the Section 8 Housing Program.

EMPLOYMENT REQUIREMENT

At least one adult family member must be employed full-time (30 hours per week)

Employed for one year

Requirement does not apply to an elderly/disabled family

INCOME ELIGIBLE

Minimum gross annual income of

$10,300.

Public assistance (welfare) cannot be

counted in determining income eligibility

requirements.

Elderly/disabled families are exempt

from this requirement.

FIRST-TIME HOMEBUYER

To qualify as a “first-time homebuyer”

the family may NOT include:

• Any person who has owned interest in part or

whole of a residence 3 years prior to

commencement of homeownership

assistance, or

• Any person who currently owns title or

cooperative membership shares.

First-time homebuyer: also includes a single parent or displaced homemaker who, while married, owned a home with his or her spouse, or resided in a home owned by his or her spouse.

MINIMUM DOWN-PAYMENT

A 3% down

payment is

required.

Of the 3% - at least

1% must be from

the family’s

personal

resources.

ADDITIONAL ELIGIBILITY

REQUIREMENTS

HOMEOWNERSHIP

COUNSELING CLASSES

Must attend and satisfactorily complete a

pre-assistance homeownership and

housing counseling program and

The Homeownership Classes must be

approved by the PHA and in conformance

under HUD’s Housing Counseling

program.

FOCUS OF COUNSELING

CLASSES

Budgeting and money

management;

Credit counseling;

Obtaining mortgage

financing;

Negotiating the

purchase price of

home;

Home maintenance;

and

Other pre-purchasing

educational information

ELIGIBLE UNITS FOR

PURCHASE

The property

purchased must

be a one-unit

property or a

single family

dwelling unit or a

condominium

INELIGIBLE UNITS

Cannot buy a

multi-family

home

\

HQS INSPECTION REQUIRED

Unit must pass a Housing Quality Standard inspection

A professional inspection will also be done at the request of your financial institution

The PHA may refuse homeownership assistance based on the results of each inspection

FINANCING

YOUR MORTGAGE

OBTAINING MORTGAGE

FINANCING

You choose which Financial Lender you want

to use;

The PHA must approve the financing before it

is finalized;

It is your responsibility to obtain all financing

for the purchase of a home;

The PHA will refer you to appropriate agencies

for additional financing assistance;

Financing - must be provided, insured or

guaranteed by the state or federal

government;

Financing - must comply with secondary

market underwriting requirements; or must

comply with generally accepted private

sector underwriting standards;

The PHA is not responsible for

any financing or become a co-

signer for any financing to

obtain a home;

The PHA will give you a letter

of commitment and certification

of your eligibility for home-

ownership assistance

The letter will indicate the

monthly payment you are

eligible to receive

The family is responsible for

payment of all services

required for securing financing

and actual purchase.

MAXIMUM TERM FOR

HOMEOWNERSHIP ASSISTANCE

Homeownership Assistance will

continue as long as the family and

property continue to meet program

requirements, but cannot exceed the

following:

If the mortgage is 20 years or longer,

initial mortgage assistance will continue

for 15 years from the date of

commencement of homeownership

All other cases are a maximum of 10

years

EXCEPTION ON MORTGAGE

TERM – ELDERLY/DISABLED

The maximum mortgage term of 10

or 15 years does not apply to elderly/

disabled families

The family must qualify as an elderly

family at the start of homeownership

assistance in order to receive this

exception

If a disabled family qualifies as

a disabled family at any time

during receipt of homeowner-

ship assistance for the family

the exception will apply

CONTRACT FOR SALE

REQUIREMENTS

Meet your Lender’s requirements;

Specify price and other terms of sale;

Specify that the purchaser will arrange

for pre-purchase inspection by an

independent inspector;

CONTRACT FOR SALE

REQUIREMENTS (CONT’D)

Specify purchaser will not be obligated to purchase the unit unless inspection is satisfactory to purchaser and PHA;

Specify purchaser is not obligated to pay for any necessary repairs; and

Must contain a certification that the seller has not be debarred, suspended or denied participation.

MONTHLY HOMEOWNERSHIP

PAYMENT:

Homeownership Payment is the lower of:

1. The Payment Standard minus the

Total Tenant Payment or

2. The family’s monthly homeownership

expenses minus the total tenant

payment.

Payment may be sent to the family

or lender;

If the payment exceeds the amount

due to the lender, the Housing

Authority must pay the excess

directly to the family.

PORTABILITY

A family may move to another

city/town with homeownership

assistance;

Family must meet that Housing

Authority’s requirements under

their Homeownership Program.

MOVING WITH CONTINUED

ASSSITANCE

The family may move to a new

unit with either:

1. Tenant-based housing or

2. Homeownership assistance

DENIAL OR TERMINATION OF

ASSISTANCE

PHA may deny or terminate

homeownership assistance, as

well as tenant-based

assistance, if the family fails to

meet it’s obligations under the

homeownership program.

DEFAULT ON PREVIOUS

MORTGAGE

The PHA cannot begin home-

ownership assistance for a family

who has previously received

assistance under the home-

ownership option and who has

defaulted on the mortgage.

RECAPTURE OF

HOMEOWNERSHIP ASSISTANCE

If the family sells or refinances

the home, the PHA shall

recapture a percentage of the

homeownership assistance.

The amount of recapture will

automatically be reduced over

a 10-year period, beginning

one year from the purchase

date, in annual increments of

10 percent.

NOTES: