HUD Assistance Options to Keep in Mind

Millions of American families are feeling the effects of the rising cost of rent and inflation. It’s challenging to find somewhere to live. Fortunately, the federal government recognizes this as a common problem. The United States Department of Housing and Urban Development (HUD) has a variety of programs for people in need of housing assistance.

The Different HUD Housing Assistance Options

When people hear “housing assistance” they likely picture designated public housing communities. However, that is only one option of assistance to consider. Some assistance options include:

Public Housing

One of the most well-known HUD assistance options is Public Housing. Unlike what most think, communities designated to public housing aren’t always apartment buildings. As an example, single-family homes are also a form of public housing. The purpose of this program is to provide housing to low-income people and families at an affordable rental rate. Local housing agencies (HAs) are in charge of managing the program. Because of this, the exact criteria to qualify for assistance depends on what area you live in. With that said, you can expect that the following will be considered on your application:

  • U.S. citizenship or eligible immigration status
  • References and eviction history
  • Income level
  • Household status

You might be wondering why the program wants you to provide references and know if you have any history of evictions. This is because the program wants applicants that are going to be good tenants. You could meet all of the other requirements but if your references show that you are a risky tenant, you could be denied. Reach out to your local housing agency if you want to begin the process of applying to this program.

FHA Loans

An FHA loan is a special type of mortgage. That’s because the Federal Housing Administration (FHA) insures these loans. The FHA is another agency of the HUD. The insurance on these loans reduces the risks for lenders. This means that lenders are protected against losses and therefore can give loans to more people. The protection works by the agency paying the principal balance on accounts where the borrower stopped paying on the loan. For applicants, the benefits of applying for an FHA loan, in comparison to some other home loans include:

  • Lower down payments
  • Lower credit score requirements

A few of the common types of FHA loans include:

  • 203(k) Improvement Loans – Homes on the market aren’t all in great condition. This type of loan is good for properties that need repairs and updates! That means, with this loan, a borrower gets extra funds to put towards renovations and repairs to improve the property.
  • Section 245(a) Loans – With this type of loan, monthly payments start low and gradually increase over time. It is for borrowers who expect their income to increase over the years.
  • Home Equity Conversion Mortgages (HECMs) – Only people 62 years or older qualify for this type of loan, commonly known as a reverse mortgage. What reverse mortgage means is that seniors can convert the equity in their homes to cash. They are able to do so, all while being able to keep the title to their home.
  • Energy-Efficient Mortgages – Just how every home is not in great condition, not every home is energy efficient. This type of loan is for people who want to make their home more energy efficient. This mortgage comes with additional funds that go towards doing so.

Good Neighbor Next Door (GNND) Program

The GNND program helps a specific group of people! In order to qualify for this program, you’ll need to work in one of these professions:

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

People who work in one of these qualifying jobs can benefit from this program! With the GNND program, individuals can get a 50% discount on a home’s listing price. While that sounds awesome, there are some other conditions. For example, the buyers have to live in the purchased home as their primary residence for at least three years. Also, to get the discount, the homes that can be bought must be in eligible revitalization areas. Lastly, there are only certain properties available through this program.

HUD Homes for Sale

When browsing for a house to buy, there are different types of properties available for consideration. One type of home that can be considered is a foreclosed home. Some foreclosed properties are exclusively sold by the HUD. The HUD gains possession of these properties because the previous owners defaulted on an FHA loan. To browse the foreclosed homes that are listed by the HUD, visit the HUD Home Store. If any of their listings are of interest to you, you will need to contact a government-registered broker to take the next steps.

Housing Choice Voucher Program

The Housing Choice Voucher Program might be the most well-known benefit program on this list. You might recognize this program by the name Section 8. This program grants housing vouchers to qualifying participants. The vouchers are used towards the cost of housing in the private market. Why is it important? Well it means that participants find their own housing. The program’s main purpose is to provide vouchers to go towards rental costs. However, in some places, they grant vouchers to go towards buying a home.

The property that the participants find must accept vouchers as a form of payment. Additionally, the property must meet other requirements such as an inspection. Similarly to some of the other options, this program is managed locally by Public Housing Authorities (PHAs). The PHAs operate the program, as well as review applicants. To qualify for this program, your local PHA will take into account the following:

  • U.S. citizenship or another eligible immigration status
  • Household status
  • Income level
  • Criminal and eviction history

Wrap It Up

As we have gone over in this article, there are quite a few housing assistance options for you to consider! The programs we focused on are all federal assistance options. Now that you know the options, you need to decide which program is best for you. Do you need assistance with rent? Are you a first responder or teacher wanting to buy a home? Do you have time to invest in a fixer-upper? Once you know which program will offer you the most relevant support, you can take the next steps toward getting needed assistance!