FSS Homeownership Program

Presently we have 175 families in the program with a capacity of 210. The program can be a very good experience for families that are transitioning into the home buying market or families that have the desire to gain employment or education to improve their living options.

An incentive of the FSS program is an escrow (savings) account. As the family rent increases due to increased earned income (30% of adjusted gross income), the increase of rent is deposited in an escrow account that they may access once their goals are completed. FSS makes it possible for participants to accumulate substantial sums of money; therefore, giving the family a down payment on a home of their own if they choose that option. To date we have 92 homeowners.

FSS is a wonderful program that is making a difference for those that are successful in achieving their goals. Participants have been able to obtain GED or higher education. Employment and training has become a priority The desire to move on from housing becomes evident as goals are obtained Three families have started their own business and a few have sent their children to college or gone back to school themselves.

 

Housing Choice Voucher Program

HUD issued a final rule on 10-12-00 for the homeownership program, allowing first time homeowners to use voucher subsidy to meet monthly mortgage expenses.

Rockford Housing Authority has placed 10 clients in their own homes since the inception of the program, with a goal to place 2 families per year.

Family Requirements

  1. Must be currently enrolled in Family Self-Sufficiency or have successfully completed the program.
  2. Must be in compliance with Section 8 and FSS programs.
  3. Must qualify as a 1st time homeowner (or not have been a homeowner for 3 years).
  4. Families must be voucher holders for at least one year.
  5. Meet minimum yearly gross income of $10,300.00
  6. Employed continuously for one year a minimum of 30 hours per week. (Not applicable to elderly and disabled residents)
  7. Families that previously requested assistance and have defaulted with their mortgage are not eligible for this program.

Family Responsibilities
Attend and complete pre-homeownership counseling.

Topics Include:

Home maintenance
Budgeting and money management
Credit repair/credit counseling
Financing aspects
Types of loans
House search
Fair housing information

Types of units eligible for this program:

House – existing or an under the construction house at the time the family enters into a contract of sale
Co-Op (no duplex)
Condo

Two home inspections needed:

An independent inspection paid for by the family.
A Housing Quality Standard (HQS) by the Rockford Housing Authority.

Home Ownership Payment:
Voucher Payment Standard determines maximum subsidy.

The monthly Homeownership Assistance Payment (HAP) is calculated as the lesser of:

Voucher Payment Standard minus Family’s Total Tenant Payment (TTP), which is 30% of gross adjustment income.

Homeownership Expenses:
Minus the Total Tenant Payment
Principal and interest on mortgage debt
Mortgage insurance
Real estate taxes
Home insurance
If home is co-op or condo, you may include membership or maintenance fees

Prohibited types of Mortgage:
Balloon payment mortgages
Variable interest rate loans
Seller financing (lease to purchase)
Seller financing on a case-by-case basis

Voucher Term Limits:
If mortgage is less than 20 years, 10 years maximum assistance.
If mortgage is 20 years or more, 15 years maximum assistance.
One time only payment if down payment option is used.

Down Payment By Family:
The RHA requires a minimum down payment of five percent (5%) of the purchase price.
A minimum of $1000.00 of family’s own funds.
Voucher funds may be used to assist with down payment or closing cost.

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