Home Ownership for Low-Income Colorado Residents
There are several programs available to low and moderate income Coloradoans that will help you make buying a home reality.
Programs can change monthly in some cases, so make sure that you ask as many questions as you need when you contact any agency below. Many of the agencies work under the Section 8 Voucher Program, so we’re going to look at what that is, first.
What is the Section 8 Voucher Program?
The US Department of Housing and Urban Development, or HUD, places Section 8 Vouchers as the federal government’s major program for assisting very-low income families, the elderly, and those with disabilities, to afford housing in the private market. In simple terms, this means that HUD helps to get people into a home of their own, not a shelter or a subsidized housing arrangement – though they do that, too, in some counties throughout Colorado.
On the local level, within counties usually, public housing agencies receive funds from HUD to administer the voucher program. You can usually find these agencies under HUD in your phone book.
When someone receives a voucher, they can find housing of their choice so long as the landlord agrees to rent under HUD – and have been HUD approved. Landlords must submit to extensive review of their property, and the housing they offer must be up to impeccable standards before HUD will approve them. This assures anyone using a Section 8 Voucher that the home they live in is safe.
After finding a home, HUD pays the full amount of the monthly rent directly to the landlord. The renter then pays the difference between the actual rend and the amount HUD has agreed to pay (usually, the renter’s amount is 30% of their income), directly to the program.
In order to become eligible to receive a Section 8 Voucher, you must apply to your local HUD office. Your total annual gross income is taken into account, and you will probably be placed on a waiting list. In Southwest Colorado, the waiting list is up to a year long, so patience is definitely needed.
To learn more about the Section 8 Voucher Program, contact:
US Department of Housing and Urban Development: www.hud.gov
To find a local office and get your application for immediate, rent-based housing started, contact:
Colorado HUD Office: www.hud.gov/local/den
Buying a Home under the Section 8 Homeownership Program
Once you have paid your rent for at least a year, on time, and are in good standing with the HUD program, you can start looking at buying a home through the same program. Just make sure that you’ve saved the other 70% of your income as well as you can during the first year – you will need to contribute $800 toward a down payment on the home you want to purchase, and will have to attend a homeownership counseling education class.
So âÂ?¦ your first step is to save up your pennies and keep the HUD agency you’re working with happy. Then, you’ll need to attend a “First-time Homebuyer’s Education” class. Free courses are offered throughout Colorado, and are required for both the Section 8 Homeownership program and several financial assistance programs that you may qualify for. Beyond the “have-to” factor, the classes are actually really beneficial, explaining the steps to homeownership in detail. They also help you with budgeting, credit issues, homeowner’s insurance, home maintenance, and everything else that might become a factor in this life-changing step you’re taking.
To learn more about the Section 8 Homeownership Program, contact:
The Colorado Division of Housing – www.state.co.us/doh
To learn more about Homeownership Education Classes, contact:
Colorado Housing Assistance Corporation – www.coloradohousingassistance.org
Colorado Rural Housing & the Self Help Program
Established in 1971 to promote safe, decent, and affordable housing largely for Hispanic American migrants and seasonal farm workers, the Colorado Rural Housing program has grown to serve all low-to-moderate income families in Colorado. They currently operate in more than 40 counties and help hundreds of families across the state.
Unlike the Section 8 programs, CRH doesn’t operate under HUD. Wonderful people make donations of both money and time to operate Home Buyer Workshops, and make homeownership a reality for low-income families.
Currently, CRH has two major homeownership programs. For more immediate, rent-based assistance, you might be interested in their Multi-Family Rental Housing Program.
The Home Ownership Program encompasses two different ideas: Self-Help Housing and Contractor Built Housing.
Contractor Built Housing is a program that provides financing to low-income homebuyers. A private contractor will partner with lenders, local governments, and other funding sources, and build a home for you. Working with CRH, you have assistance paying the costs.
Under the Self-Help Housing program, you work as a general contractor to build your own home. With this program, participants build their own homes, investing more than 800 hours during a 3-6 month time span. But you’re not alone – about 8 other families will help you build your home to ensure quality and timeliness. In turn, you help another family build their home, and pass the favor on.
This program requires “sweat” for equity, not a down-payment. Interest rates on the final purchase vary depending on your family income, but when the home is complete most families have over $20,000 in equity. Currently, CRH is operating the Self-Help project in Alamosa and will be expanding to the metropolitan area, so don’t hesitate to contact them if you don’t live in Alamosa. They’re great people to work with, and really want to see you succeed.
To learn more about the Self-Help Housing Program, contact:
Nancy Jacobsen – njacobsen@qwest.net or visit the CRH website at www.crhdc.org
