Posted by Carey_PA on September 01, 2001 at 09:58:57:
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Section 8 First Time Home Buyers Program? - Posted by Carey_PA
Posted by Carey_PA on August 30, 2001 at 16:44:23:
Does anyone know how this works?? I had someone call me last night and tell me that section 8 has this program and they were wondering if they could buy the house with that program.
I told them that I’d have to find out exactly how it worked because they weren’t sure…does anyone know about this new program that section 8 is offering??
Thanks,
CAREY
Re: Section 8 First Time Home Buyers Program? - Posted by Jim FL
Posted by Jim FL on August 30, 2001 at 21:36:04:
Carey,
Kim certainly seems to know what she is talking about, and I hope she is right.
When I read your post, I thought about the Nemiah program.
I’m not totally sure how it works, but I think the basic jist of it is that hud or some govt. agency contributes a certain amount toward the sale for closing costs etc, as long as the seller matches this contribution.
Again, I’ve never used it, and am only going on what I’ve heard, so I could be 100% wrong.
Call some local mortgage brokers and ask.
They should know.
HTH,
Jim FL
Re: Section 8 First Time Home Buyers Program? - Posted by Kim
Posted by Kim on August 30, 2001 at 18:06:55:
Hi Carey,
It’s not exactly a “first time homebuyers program” although for most I imagine it will be just that. In Oct. of 2000 HUD once again allows certificate holders to purchase a home with their certificate. This is being implemented piecemeal throughout the country because HUD has left the administration and decision making in the hands of each individual county.
What this means is that each county will have autonomy in how this is administered, hence no real Fed. Guidelines. About the only real guidelines are to be careful to keep the buyer out of the hands of predatory lenders.
It is my understanding that Sec. 8 will make payments on the property for 15years and then I suppose the buyer will finish making the payments. The thoughts are that homeownership will assist folks in becoming self-sufficient and by year 16 they will be in a position to complete the contract.
In the past there were other programs like this and because of predatory lending practices coupled with unsophisticated buyers they failed miserably.
Working with two attorneys who will be pivotal in the program here and they feel there are better safeguards now than in the past.
The mortgage broker I am working with has shared with me that 1 of every 3 certificate holders has qualified for a loan. They will be referring the non qualifiers to social service agencies who will assist them in preparing to qualify for homeownership. Within a couple of years there should be a substantial pool of Sec. 8 certificate holders who will qualify for purchase.
Hope this helps. Feel free to e-mail me for more information if you need it. I’ll try to answer.
Kim
Re: Section 8 First Time Home Buyers Program? - Posted by Kim (FL)
Posted by Kim (FL) on August 31, 2001 at 13:52:31:
I can tell you how Nehemiah works. I use it all the time (I’m a mortgage broker).
HUD has nothing to do with it except that Nehemiah was approved by HUD so it could be used in conjunction with FHA loans. It’s a 501c3 corp that “gifts” the money to the buyer - so it acts as a “middle man” to funnel funds. The funds come from the seller and go to Nehemiah and then Nehemiah “gifts” it to the buyer. Nehemiah keeps 1% of the money or $850 - which ever is less. Nehemiah is used when the buyer can’t come up with their down payment. So - the seller will give 4% of the sales price to N and then 3% goes to the buyer which is their 3% down payment for a FHA loan.
The BEST Thing about this program is that it’s not part of the seller contribution. The seller can do Nehemiah for the DP and THEN pay 6% towards closing costs/prepaids. SO - you can really truly get buyers in for NO money with a FHA loan. I do this a lot and it’s a GREAT program!
My husband and I are selling a rehab that we did and we have a rider sign on the real estate sign that says “buy this home for less than 1k”. It’s getting us calls. We’ll, of course, get our money by raising the SP to cover their costs.
Re: Section 8 First Time Home Buyers Program? - Posted by Carey_PA
Posted by Carey_PA on August 30, 2001 at 22:54:11:
Kim,
Thanks for your response. I was going to email you privately, but I figured that the response that I hopefully will get back from you will benefit others that may be interested in this program as well.
Ok, so section 8 let’s them use their certificate to pay their mortgage for 15 yrs. and hopefully by the 16th year they are self-sufficient enough to be a “real” homeowner and pay all the bills.
Ok, so I have a property and someone that has a section 8 voucher wants it and is going through this program. So…I get cashed out right?? And then section 8 or whatever mortgage broker they are working with deals with the payments, right?
Please correct me if I’m wrong, because obviously I don’t want to be stuck with payments for 15 yrs. on a house that I know I can sell within a year time frame on a lease option.
It certainly would be nice to be cashed out now and I’ve had several section 8 people call me, but this last woman was the only one that knew about this program.
Thanks again for your in depth answer Kim.
CAREY
Re: Section 8 First Time Home Buyers Program? - Posted by joe slaem
Posted by joe slaem on August 30, 2001 at 21:35:17:
hi kim just wanted to know how can i find out if my houses will qualify for section 8 program and how much of a percentage due they pay of the rent 50%?
Thanks for your help
Re: Section 8 First Time Home Buyers Program? - Posted by Kim
Posted by Kim on August 31, 2001 at 14:51:46:
Carey,
The Sec. 8 certificate holder will apply for a conventional loan through a bank or mortgage broker who is familiar with the program.
You will be cashed out at closing. It takes a little longer time to get the loan approved with this program so start early with your potential buyers.
Hope this helps.
Re: Section 8 First Time Home Buyers Program? - Posted by Kim
Posted by Kim on August 31, 2001 at 15:00:08:
Joe,
To find out if your property will qualify for Sec. 8 call your county housing authority and ask for a landlord package. This should give you some of the information you are seeking.
In Hamilton County OH there is a county Sec. 8 program and also a city of Cincinnati Sec. 8 program and each have somewhat different guidelines. My contacts and the Legal Aid attorneys tell me the County program is better and easier to deal with.
Under the Sec. 8 program rents vary according to the program but a good rule of thumb is that Sec. 8 generally pays 60 - 70% of the base rent.
Hope this helps.
Kim