Section 8 Homeownership Program Eligibility Requirements: Income, Work, Counseling, and Time Limits

How the voucher homeownership option works

Most people know the Housing Choice Voucher program, often called Section 8, as rental help. The same voucher can sometimes be used toward buying a home instead. HUD calls this the homeownership option. It is part of the voucher program, not a separate program with its own waiting list.

Under 24 CFR 982.625, a housing agency may offer two forms of help:

• Monthly homeownership assistance payments, which help cover the mortgage and other housing costs each month. This is the form most agencies use.
• A single down payment assistance grant. The rule says agencies may not offer this form until HUD publishes a notice in the Federal Register, so it is rarely available. Ask your agency whether it offers it.

A family can receive only one of the two forms, ever. You still find your own home, get your own mortgage from a lender, and become the legal owner. The voucher helps you make the payments.

Not every housing agency offers it

This is the first thing to check. The federal rule lets each public housing agency choose whether to run a homeownership program. Many agencies do not. If yours does not, you generally cannot use this option there, with one exception: the agency must offer homeownership assistance when it is needed as a reasonable accommodation for a person with disabilities, and the agency decides what is reasonable in each case.

Agencies that do offer it often limit how many families can take part each year and may add their own requirements, such as a minimum credit score, a savings amount, or a set time as a voucher holder in good standing. Those extra rules must be written in the agency’s Administrative Plan, which you can ask to see. To find your agency’s contact information, use HUD’s local resources map, or see our guide to the public housing agency application.

Section 8 homeownership program eligibility requirements at a glance

24 CFR 982.627 lists the requirements a family must meet before assistance starts. The table sums them up.

The first-time homeowner rule

Federal rules define a first-time homeowner as a family where no member has owned any present ownership interest in a home during the three years before assistance begins. So if you owned a home five years ago and have rented since, you may still count as a first-time buyer.

The definition also includes certain single parents and displaced homemakers, which can help someone who owned a home only with a former spouse. A family can also qualify without being a first-time homeowner if a member has a disability and the homeownership option is needed as a reasonable accommodation. Ask your agency how it applies these rules to your history.

Minimum income rules

The rule sets a floor on the yearly income of the adults who will own the home. It counts only those owners’ income, not everyone in the household.

Some details matter here:

• Welfare assistance does not count toward the minimum for most families. It does count for elderly and disabled families. This only affects whether you meet the floor. It does not change your voucher eligibility or your payment.
• Agencies can set a higher minimum. But if you meet the federal minimum and a lender has pre-qualified or pre-approved you for a loan that meets the agency’s rules and is enough to buy a decent home locally, the rule says you must be treated as meeting the income requirement.
• The SSI figure changes each January with the cost-of-living adjustment, so the disabled family minimum rises over time.

The employment requirement and exemptions

For most families, at least one adult who will own the home must be working full time now and must have worked full time without a break during the year before assistance starts. The rule defines full time as an average of at least 30 hours a week.

The agency has some flexibility. It can decide whether short gaps break the year of work, it can count back-to-back jobs during the year, and it can count self-employment. It cannot add a stricter work rule of its own.

The work requirement does not apply to elderly families or disabled families, as defined in HUD rules (generally, the head, co-head, or spouse is 62 or older, or is a person with disabilities). If a family that is not a disabled family includes a person with disabilities, the agency must waive the work rule if that is needed as a reasonable accommodation.

Homeownership counseling

Under 24 CFR 982.630, every family must complete the agency’s pre-assistance homeownership counseling before help begins. The rule says this counseling must be given by a HUD-certified housing counselor at a HUD-approved agency. Suggested topics include:

• Budgeting, money management, and credit counseling.
• How to get a mortgage pre-approval and compare loan types.
• How to find a home and negotiate the price.
• Home maintenance and repairs.
• Fair housing and fair lending rights.
• How to spot and avoid loans with harmful terms.

Some agencies also require ongoing counseling after you buy. You can find a HUD-approved counselor through HUD’s housing counselor search. Counseling is a good time to work on your credit, since most lenders still review it. Our guide on how to increase your credit score to buy a house has practical steps.

Homes you can buy and required inspections

24 CFR 982.628 says the home must be a one-unit property (including a manufactured home) or a single unit in a condominium or cooperative. A manufactured home on leased land can qualify if it sits on a permanent foundation and the family has the right to stay on the site for at least 40 years.

Before assistance starts, the home must pass two inspections:

1. An inspection by the housing agency to confirm it meets HUD’s housing quality standards.
2. An independent professional inspection that you choose and pay for, covering the foundation, roof, plumbing, electrical, and heating systems. The agency can still turn down the home based on that report.

Your contract of sale must state the price, allow for the independent inspection, and let you back out if the inspection is not satisfactory. The agency can also set rules for lenders and loan terms, so check before you sign anything.

How the monthly assistance is figured

Under 24 CFR 982.635, the monthly payment is the lower of two amounts:

• The agency’s payment standard minus your total tenant payment (generally about 30% of your adjusted monthly income), or
• Your monthly homeownership expenses minus your total tenant payment.

Homeownership expenses can include mortgage principal and interest, mortgage insurance, property taxes, homeowner’s insurance, the agency’s allowances for maintenance, major repairs, and utilities, and some loans for major repairs or accessibility changes. Condo or co-op fees can count too. The agency may pay you directly or pay your lender. You pay the rest of the mortgage yourself.

How long assistance can last

24 CFR 982.634 sets the maximum term of monthly help:

If a family stops being elderly or disabled, the time limit applies from the date assistance began, but the family gets at least 6 more months of help. Time counts across all homes and all agencies. Plan ahead for the year when assistance ends, because the full mortgage payment becomes yours.

Keeping the home after you buy

Federal rules in 24 CFR 982.633 list your ongoing duties. You must live in the home, follow your mortgage terms, complete any ongoing counseling the agency requires, report income and mortgage information, and tell the agency before you move or if you default on the mortgage.

If the family loses the home through foreclosure, the agency must end homeownership assistance. It may let the family go back to rental assistance in some cases. Adults in a family that defaulted on a voucher-assisted mortgage cannot get homeownership assistance again. If you fall behind, call a HUD-approved housing counselor right away. The CFPB’s homebuying guide also explains mortgage costs in plain terms.

Looking for more ways to cover the down payment and closing costs? See our guide to first-time homeowner grants, and ask your agency about local down payment programs.

Applying through your housing agency, step by step

1. Get a voucher first. If you are not yet a voucher holder, apply to your agency’s waiting list.
2. Ask your agency whether it offers the homeownership option, and ask for its written rules.
3. Check the federal rules: first-time buyer status, minimum income, and work history, or your elderly or disabled family exemption.
4. Complete homeownership counseling with a HUD-certified counselor.
5. Get pre-approved for a mortgage that meets the agency’s lender rules.
6. Find a home, sign a contract of sale with an inspection clause, and pass both inspections.
7. Close on the home and start monthly homeownership payments.

Related guides

• Housing Choice Voucher program
• Section 8 application
• First-time homeowner grants
• Down payment assistance program

Frequently asked questions

This guide is general information about federal rules. Each housing agency decides whether to offer the homeownership option and may add its own requirements. National Relief Program is an independent website and is not affiliated with HUD or any housing agency.