Home Ownership and Section 8 Mortgage?
By: Elaine VonCannon, ABR, SRES, REALTOR, NOTARY, PROPERTY MANAGER, TEAM LEADER
You know I was speaking with my Broker/Owner the other day. He made a comment which caused me to pause and think.
I do property management and we were talking about landlords and tenants. The topic switched to home sales in our area, can you picture that. This is the place where you smile.
Now to the serious topic of this blog, I will proceed. My Broker said, "Elaine, I do not understand why instead of section 8 vouchers, that someone could not come up with a way for this money to count as part of a mortgage payment for people." This was how our discussion started, and it started me thinking.
With all the foreclosures that our country is facing, leaving vacant properties which can become an eyesore or worst in a community, surely there is a way that this could work.
Here is how I think it could work:
1. The applicant for the Section8 mortgage would have to have at least 8 years of steady employment, whether it is a single parent or a couple.
2. The applicant would have to have at least a 600 credit score.
3. The applicant would have a 10 year mortgage payment at 4% interest, which would adjust to 5% for the remainder of the loan (no more than 30 years).
4. The applicant would have to be able to pay on their own at least 1/3 of the mortgage payment with the Section 8 mortgage paying the remainder for the 10 years. The remainder of the mortgage would adjust to 1/2 the next 10 years and then to 2/3 that the applicant would pay for the remainder of the mortgage.
5. The applicant would also have to have a good rental history with no evictions or judgments.
6. At any time the applicant looses the section 8 mortgage waiver then the applicant would be responsible to pay the whole mortgage payment.
A. A single parent would remarry.
B. Income levels rise, they would have to turn in a wage form every year for review to see if they still meet the criteria.
C. Death of the mortgage holder the estate would have to procure their own mortgage or place the property for sale with review of the listing agreement by the Section 8 mortgage holder.
7. The applicant would receive all the tax deductions that are allowed by the tax law under home ownership, with the Section 8 mortgage holder providing the documentation at the end of each tax year.
8. If the property is sold then all equity that has been occurred would be earned by the applicant.
9. An applicant would only be eligible for this mortgage 2 times in their lifetime. The limit to the amount of the mortgage would be determined by the area that the applicant purchases in and the amount that they could be approved for taking into account the portion that the applicant would be responsible for paying.
10. If the applicant buys a short sale or foreclosure then the repairs would be consider part if the loan and money would be escrowed at the time of closing for the repairs.
I firmly believe that a system like this one could work. Put the Section 8 money to work for the good of the people not just for rent.
Visit my web sites to view other listings at www.voncannonrealestate.com www.estatesinvirginia.com You will also find articles and more information on homes, the Virginia real estate market and my team.
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