Tag: Individual Development Account
NOTE: To be eligible for this program, participants must already receive Section 8 rental or public housing assistance.
The Louisville Metro Housing Authority’s Section 8 Homeownership Program allows eligible Section 8 and public housing residents to use their housing subsidy toward a mortgage payment instead of rent. The term of assistance is 15 years if the mortgage has a term of over 20 years and 10 years in all other cases (exceptions are made for elderly and disabled families).
This assistance can only be used towards monthly mortgage payments; program participants must cover all costs associated with inspections, down payment, closing and on-going home maintenance.
Eligibility requirements for participants include, but are not limited to the following:
- Must be a first-time homeowner (not owned a home in the past 3 years)
- Must meet minimum income requirement of $14,500 (minimum wage x 2,000 hours) or, in the case of a disabled family $8,088 (monthly SSI benefit for a single x 12 months)
- One or more adult members of the family must be currently employed full-time and have been continuously employed during the past year (exceptions made for elderly and disabled head of household)
- Participants must attend and complete homeownership counseling offered by either the Housing Partnership or the Louisville Urban League
- Must have stable family composition (at least one year)
- Must not have been in the termination of assistance process more than once in the last two years
- Must not owe the Louisville Metro Housing Authority or any other Housing Authority an outstanding debt
If the eligibility requirements are met, program participants will have 120-days make an application with a participating lender and secure pre-approval for a loan, find a prospective home, and sign a sales contract (with up to two 120-day extensions available). Program participants will remain on LMHA’s rental assistance until the home purchase is complete (if unsuccessful, rental assistance will remain in effect).
On-going obligations include, but are not limited to the following:
- Residence in the home
- Participation in Post-Purchase Counseling and Individual Development Account for repairs and maintenance
- Maintain on-going “full-time” employment (at least 30 hours per week). Except for disabled and elderly households, each household must demonstrate that each person 18 years or older is either employed full-time, or is a full-time student, or is providing care to a child or disabled person on a full-time basis. The head of household must be employed; for other adults, a combination is allowed as long as the total is not less than the average of 30 hours per week. Self-employment requires a net income (income after business expenses have been deducted) that equals the federal minimum hourly wage multiplied by 1,500 hours
Home Purchase Requirements
Homes may be purchased throughout the Louisville Metro area and in some cases outside of the area if certain conditions exist. The home must be under construction or already be in existence at the time the family enters into the contract of sale. The home must also meet the following criteria:
As of February 28, 2010:
156 families have successfully purchased homes (87 working full-time and 69 disabled families).
Average income is 16,371 with average of 2.8 people per household.
Average home sales price is $93,034 with average of 2.8 bedrooms.
Average tenant payment (at least 30% of income) is $451 and average housing assistance payment is $372.
Sixteen clients’ incomes have increased enough to no longer need Section 8 assistance.
Every client has successfully completed pre-purchase homeownership counseling, and participated in post-purchase counseling and Individual Development Account matched savings program.