Contact Information. Oklahoma City Housing Authority 1700 Northeast Fourth Street Oklahoma City, Oklahoma

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1 Contact Information Oklahoma City Housing Authority 1700 Northeast Fourth Street Oklahoma City, Oklahoma Executive Director Director Leasing/Rental Assistance Family Self-Sufficiency Coordinator / Section 8 Homeownership Coordinator John H. Johnson Richard R. Marshall Ryland R. Moore

2 Section 8 Homeownership Program Briefing Session

3 Introduction

4 Introduction Cont. Section 8 Programs are funded by the Department of Housing and Urban Development (HUD), and administered by public housing agencies authorized under federal or state law to operate housing programs within an area or jurisdiction.

5 Introduction Cont. Section 8 is a free-choice approach to assisted housing.

6 Introduction Cont. Instead of the hustle of apartment living one may prefer the quietness of...

7 Introduction Cont. living in a home with a yard of your own.

8 Introduction Cont. A person selected to participate in the Section 8 Program is issued a Housing Choice Voucher and is then free to locate a dwelling unit suitable to the family's needs and desires in the private rental market.

9 Introduction Cont. Both options are available under the Section 8 Program. Apartment House

10 Introduction Cont. Once the family selects a unit, OCHA will inspect the unit before initial leasing and at least annually thereafter to ensure the unit meets HUD Housing Quality Standards (HQS).

11 Introduction Cont. Once the unit passes an HQS inspection, OCHA will enter into a Housing Assistant Payment (HAP) Contract with the Owner who leases the unit to the family.

12 Introduction Cont. Thereafter, OCHA pays a portion of the rent or HAP payment, directly to the owner on behalf of the family. The tenant will pay the remaining portion of the monthly rent, based on his/her income each month directly to the owner. Under the Housing Choice Voucher Program, the family is generally required to pay approximately 30% of adjusted monthly income toward rent and utilities. The HAP payment made by OCHA to the Owner generally pays the remaining 70% of the approved contract rent.

13 SECTION 8 HOMEOWNERSHIP PROGRAM (HOP) OVERVIEW

14 Program Overview OCHA will assist eligible Section 8 Housing Choice Voucher Program participants to purchase a home by offering a Homeownership Assistance Payment towards a mortgage payment. OCHA will offer the HOP to FSS participants first. OCHA will then offer the HOP to the Section 8 Program participants. OCHA will determine who is eligible/ineligible to participate in the program.

15 Program Overview Cont. After the family is determined eligible, and has completed the Homebuyer Education Class, a voucher on the HOP will be issued. The voucher will specify family requirements and the timeline for all activities to be completed. OCHA and partners will assist with steps to secure... financing; locate a property; obtain a home inspection; and close. Ongoing counseling will be offered as a preventative measure and as needed.

16 . Program Overview Cont. Participants will be required to continue to meet eligibility requirements which include: annual recertification; and annual property inspection. OCHA will not provide financial assistance to purchase a home other than the monthly Homeownership Assistance Payment. OCHA ACCEPTS NO RESPONSIBILITY FOR ANY FINANCIAL LOSS BY: the client; lenders; or or any other individuals throughout the process.

17 Program Overview Cont. PARTICIPATION DOES NOT GUARANTEE THE PURCHASE OF A HOME.

18 PROGRAM ELIGIBILITY

19 The Family May Purchase a Home: Anywhere within the Oklahoma City jurisdictional area. The program will be offered to Family Self- Sufficiency (FSS) participants first. If enough FSS participants are not interested or eligible, we will then offer the remaining slots to all other Section 8 Program partipants.

20 To be eligible you must: Requirements be a participant of the Section 8 Housing Choice Voucher Program; and participating in the FSS Program; or a participant of the Section 8 Housing Choice Voucher Program. be eligible to participate in OCHA programs by standard requirements; be in good standing with all programs currently participating in; have no outstanding debts to OCHA; and possess a satisfactory rental payment history for at least one year.

21 Income Must have a minimum gross monthly income of $5.15 X 2000 hours (except in case of elderly or disabled person). Welfare assistance (except in case of elderly or disabled) shall not be counted in determining annual income. Welfare assistance shall be counted in determining annual income for elderly and disabled families; Families may be eligible to count the annual HAP made on their behalf as annual income;

22 Income Cont. 125% x Housing Assistance Payment Example: Housing Assistance Payment=$ $ x 12 x 125% = $6, additional income.

23 Pre-credit Screening: You must pass a preliminary credit screening process; and You must obtain Certification of completing a Homebuyer Education Class. Verifications Employment will be verified and cannot be more than 30 days old.

24 To qualify as a first-time homebuyer the assisted family may not include: any person who has owned interest in part or whole of a residence three years prior to commencement of homeownership assistance, or one who currently owns title or cooperative membership shares. A First-Time Homebuyer is: A family that moves for the first time from rental housing to a family-owned home.

25 Program Eligibility To purchase the home an adult member must be employed at least 30 hours per week and been working at least 30 hours per week for the past twelve (12) months. NOTE: Employment does not have to be with the same company but neither can there be more than a thirty (30) day break in hours worked. Employment requirements do not apply to the elderly or disabled.

26 Homeownership Voucher After eligibility is determined a family will have 120 days to: secure financing; close; and relocate to new home. If family misses the 120 day deadline: an extension may be requested and is subject to review and must be requested prior to deadline. OR a rental voucher may be issued.

27 Financing OCHA will assist the HOP participant in: Application submission to the Lender; Selecting a lender; and Referrals to appropriate agencies. Participants may use any FSS Escrow funds accumulated without penalties; Participants are required to pay at least 3% down. At least 1% of the 3% must come from the participant s personal resources; Participant is required to obtain all financing for the home;

28 Financing Cont. OCHA will make referrals to appropriate agencies for additional financial assistance; Financing of the home must be provided, insured or guaranteed by the state or federal government; Financing of the home must comply with secondary market underwriting requirements; or

29 Financing Cont. Financing of the home must comply with generally accepted private sector underwriting standards; OCHA will not be responsible for any financing or become a cosigner for any purchases; Balloon payments are not acceptable; Variable interest rates are not acceptable;

30 Financing Cont. Participants are responsible for payment of all services required for securing financing and actual purchase; Lease purchase agreements are acceptable; HOWEVER, All and any additional payments or charges in establishing or maintaining agreement will be the responsibility of the family.

31 Eligible Units for Purchase All properties must pass an HQS inspection; All properties must pass a professional inspection selected by the family; OCHA may refuse the property based on the results of each inspection; All properties purchased must be either a single family unit, condominium or mobile home; Can be a unit under construction or already existing at the time the family becomes eligible for homeownership assistance; and Must meet lender requirements and specifications.

32 Contract of Sale Before homeownership assistance can begin, the family must enter into a Contract of Sale. A copy must be provided to OCHA.

33 Contract of Sale Requirements Must meet lender requirements; Must specify price and other terms of sale; Must specify purchaser will arrange for pre-purchase inspection; Must specify purchaser will not be obligated to purchase the unit unless inspection is satisfactory to purchaser and OCHA; Must specify purchaser is not obligated to pay for any necessary repairs; Must contain certification that the seller has not been debarred, suspended or denied participation.

34 Monthly Homeownership Assistance Payments Will be made only as the family occupies the property and complies with all Section 8 program requirements; and All payments will be made to the lender; Homeownership Payments shall be the lower of: The Payment Standard minus the Total Tenant Payment (TTP); or Family s monthly homeownership expenses minus the TTP.

35 Payment Standard The payment standard is the amount used to calculate the housing assistance a family will receive in the OCHA s Rental Voucher Program; OCHA s payment standard will be set between % of the applicable Fair Market Rent (FMR); The payment standard will be established by unit size; Persons with disabilities requesting a reasonable accommodation to have the payment standard exceed 110% of FMR will require approval from the local HUD office;

36 Payment Standard Cont. Examples: Payment Standard minus the Total Tenant Payment (TTP) $ $ = $ Family s monthly homeownership expenses minus the TTP $ $ = $406.00

37 Monthly Homeownership Assistance Payments Homeownership Expenses Principal and interest; Mortgage insurance; Homeownership Insurance; Property Taxes; Cooperative or condominium operating fees; and Expenses for reasonable accommodations to elderly and disabled

38 Monthly Homeownership Assistance Payments Annual Recertification Annual recertification of the family composition and income will remain a requirement; Passing an annual HQS Inspection of the property will remain a requirement. Any repairs to be completed for HQS will be the responsibility of the family. If the family fails to fulfill annual reexamination requirements or the property fails to pass HQS upon reinspection, all homeownership assistance will be discontinued with a thirty-day notice to the family; and

39 Monthly Homeownership Assistance Payments Annual Recertification Cont. The family will be removed from all other Section 8 Programs. All income eligibility and family composition requirements under the Section 8 Rental Assistance Program apply to the Section 8 Homeownership Program.

40 Monthly Homeownership Assistance Payments Cont. Homeownership Assistance Payments automatically stop 180 calendar days after 30% of the family s adjusted gross income equals or exceeds the Payment Standard for which they are certified.

41 Maximum Term for Homeownership Assistance Homeownership Assistance Payments will continue as long as the family and property continue to meet program requirements but cannot exceed the following If mortgage is 20 years or longer, initial mortgage assistance will continue for 15 years from the date of commencement of homeownership assistance payment. All other cases are a maximum of 10 years.

42 Maximum Term for Homeownership Assistance Cont. Elderly/Disabled Ten and 15-year limitations do not apply to elderly/disabled; However, If an elderly/disabled family becomes unclassified as elderly/disabled, maximum limit shall commence from the date certified to participate with HOP and not from date of reclassification;. Whichever apply, an elderly or disabled family shall be provided at least 6 months of homeownership assistance.

43 The length of homeownership assistance is cumulative regardless of the number of homes or jurisdictions.

44 Family Obligations Homeownership assistance payments may be paid only while the family is residing in the home. If the family moves out of the home, OCHA will discontinue payments after the month the family moved out. OCHA will not seek reimbursement for this monthly payment.

45 Family Obligations Cont., To continue receiving assistance the following obligations must be complied with: All income and family composition changes must be reported; All additional homeownership and housing counseling necessary must be completed; All mortgage terms must be complied with including the refinancing of any debt; The family must live in the unit while receiving assistance; All family members to reside in the home must be approved by OCHA;

46 Family Obligations Cont., Prior authorization by OCHA must be granted to the family to finance the purchase of the home including refinancing; In the event of the death of a family member who holds, in whole or part, title to the home or ownership of cooperative shares, homeownership assistance may continue pending settlement so long as the home is occupied solely by the remaining family members; All repairs are to be made by the family to the dwelling unit to meet minimum HQS standards; and All requested information must be supplied to OCHA within specified time frames.

47 Family Obligations Cont., All information requested by HUD or OCHA must be supplied and could include: 1. Mortgage or debt incurred to purchase the home. 2. Documentation regarding refinancing of the debt. 3. Information regarding whether the family has defaulted on the debt. 4. The nature of any such default; 5. The satisfaction of payment of the mortgage debt; 6. Any sale or transfer of any interest in the home; or 7. The family s homeownership expenses.

48 Family Obligations Cont. The family must notify OCHA 30 days prior to moving out of the home; The family must notify OCHA if the family defaults on the mortgage; While receiving homeownership assistance no family member may have any ownership interest in other residential property; OCHA may establish additional requirements for continuation of homeownership assistance; and The family must comply with any additional requirements of the program.

49 Portability Individuals eligible for homeownership assistance by the initial PHA may purchase a unit outside the initial PHA s jurisdiction if: (1) the receiving PHA is administering the program; and (2) is accepting new homeownership families. Participants are eligible to move with either (1) Tenant- Based Rental Assistance; or (2) Homeownership Assistance. However, with Tenant-Based Rental Assistance all Housing Choice Voucher requirements must be met.

50 Portability Cont. In addition, no rental assistance payments may be made on the new rental as long as the family still holds interest (name on title) in any other property; and To move with continued assistance all initial requirements must be met except: (1) homebuyer counseling; and (2) first-time homebuyer requirement.

51 Denial Or Termination Homeownership and Rental Assistance will be terminated for a family in accordance with: 24 CFR (Grounds for Denial or Termination of Assistance); 24 CFR (Crime by Family Members); 24 CFR and 24 CFR (Failure to comply with family obligations); or any family member by order of foreclosure. However, OCHA may issue a Housing Choice Voucher to the family if the title to the home has been transmitted as required by HUD to HUD or HUD s designee and the family has moved from the home within the period established by HUD.

52 Recapture Of Homeownership Assistance Upon sale or refinancing of the home OCHA shall recapture a percentage of the homeownership assistance provided to the family( cash-out); Upon purchase of the home documentation shall be required consistent with State and local law securing OCHA s right to recapture of homeownership assistance; The lien securing the recapture of homeownership subsidy may be subordinated or subject to a refinanced mortgage; and

53 Recapture Of Homeownership Assistance When SELLING The Home If the home is sold the recapture shall be: An amount equaling the lesser of the amount of homeownership assistance provided to the family; or The difference between the sale price and purchase price of the home minus the cost of any capital expenditures, the cost incurred by the family in selling the house (sales commission and closing costs); or The amount of the difference between the sale price and purchase price that is being used, upon sale towards the purchase of a new home under the HOP.

54 Recapture Of Homeownership Assistance When REFINANCING When refinancing the home, the capture shall be the amount equaling the lesser of the amount of homeownership assistance provided to the family; or The difference between the current mortgage debt and the new mortgage debt minus the costs of any capital expenditures; or The cost incurred by the family in the refinancing of the home (such as closing cost. Any amounts that have been previously recaptured as a result of refinancing.

55 Homeownership is not just a dream, but a dream come true.