Wednesday October 9, 2013
Section 8 program helps families with ownership,
A single father with three children has closed on a home in Louisville’s Okolona area, becoming the 200th to gain ownership through the Section 8 Home Ownership program operated by the Louisville Metro Housing Authority.
The program allows rental subsidy to be used for mortgage payments instead of rent. All of the program participants are low-income, with average income of under $17,000 a year.
The new homeowner, Travis Phillips, said he wanted to buy in the South Louisville area so his son and two daughters would not have to change schools.
The 200th home closing, which occurred late last month, puts the Louisville Housing Authority in the top ten nationally in closings from the more than 900 housing authorities. In 1997, the local housing authority became the first in the nation to apply Section 8 subsidies toward mortgage payments.
“With rising foreclosures and predatory lending practices, this is a program that helps people find and maintain a home which helps families achieve financial independence and helps stabilize our neighborhoods,” said Tim Barry, the housing authority’s executive director.
The authority’s assists only with the monthly mortgage payments. Clients are responsible for the costs of inspections, down payment and closing costs before the purchase and all home repairs and maintenance after purchasing. The term of assistance is 15 years if the mortgage has a term of over 20 years and 10 years in all other cases. There is an exception made for elderly and disabled families.
All participants complete a pre-purchase Homeownership Counseling program to become “mortgage ready.” The counseling covers issues such as home maintenance, budgeting and money management; credit counseling; negotiating the purchase price and securing mortgage financing.
Since the program began in 1997, only two participants have defaulted and 23 have seen their incomes increase to the point where they no longer needed the Section 8 subsidies.
Partners on the 200th home closing include the U.S. Department of Housing and Urban Development, Kentucky Housing Corporation, Patriot Bank Mortgage Inc., and the Housing Partnership Inc.