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HUD & How to Qualify?

If you’ve been looking to purchase or rent a low-cost house then you may have come across the HUD or Department of Housing and Urban Development. This government agency was developed to assist buyers and renters with affordable housing by saving you thousands of dollars in monthly rent or when applying for a qualifying mortgage through its various programs and initiatives.

Four friends admiring an ocean view after a hike
Everyone should benefit from HUD services when they need it!

So, if you’re interested in becoming a homeowner but you want housing that you can afford, then learning more about the opportunities that are offered by the HUD can certainly help you in your journey.

Let’s start by looking at what the HUD is and how it can help you with affordable housing.

Department of Housing and Urban Development – A Brief Introduction

The Department of Housing and Urban Development otherwise known as the HUD is a government agency that creates and implements policies concerning the affordable or low-income housing sector. Some of the services that you can expect from the HUD include assistance with a mortgage so you can buy a home, qualifying for Public Housing or Section 8, and management of various housing issues in the US.

Their role is to help more Americans with access to rentals and homeownership that they can afford.

But how does this apply to your situation and how can the HUD help you? The HUD typically assists with the following circumstances:

  • Difficulty qualifying for a mortgage based on income

  • Trouble with low income or affordable homes to rent

  • Emergency housing after a flood, fire, or another event

  • Assistance with temporary housing from a violent or abusive spouse

  • Evictions and more

Let’s learn about who the HUD is, the programs they offer, and when you should contact them for assistance.

The HUD Defined

HUD is a federal or government program whose goal is to provide households with decent and cost-effective housing. The purpose of the agency is to support the economy by providing more people with the chance to buy or rent a home.

The agency was founded in 1965 with the purpose of addressing poverty and housing issues that plagued the US at the time. In 2019, the United States Census Bureau revealed that 43.96 million people were still living below the poverty line.

Black and white picture of two houses
The original affordable housing was meant to alleviate poverty in the mid 1900s

The federal program has tried its best at providing all families and individuals decent housing, there is still a major shortfall that has left people destitute. While the housing agency plans on future property developments and making more homes available to those on a low income, there is still a long road ahead to curb the housing crisis and assist people with homelessness.

HUD Programs

To help you decide whether to contact HUD for housing assistance, we look at the different programs that are available through the agency.

1. FHA Mortgages

The FHA or Federal Housing Administration offers mortgages to applicants who are interested in purchasing a home and who satisfy the stipulated qualifying criteria. This means that people on a low to mid-income who previously wouldn’t qualify for a home loan through a conventional lender will have the chance to apply for a mortgage to buy a house.

How to Qualify for an FHA Loan

Only FHA-approved lenders can issue this type of loan. Once you receive approval for the loan, it will be supported by the FHA to mitigate some of the risks to the lender. To get approved for this type of loan, you will have to take mortgage insurance out. The purpose of mortgage insurance is to provide financial protection if you cannot repay the loan.

To get approved for an FHA loan, you will need to meet the following requirements:

  • Must have full-time employment

  • Sound debt management (less than 43% debt ratio)

  • Cannot rent or sublet the home you are buying

  • A minimum of 3.5% down payment is necessary

  • Bad credit applicants may need to issue a down payment of 10%

2. Home Investment Partnership Program

The HOME program was created to support housing developments in specific communities. When a community needs finding to improve the condition of apartments to rent in the area or they wish to provide shelters for struggling families, the program will donate a specific sum of money with the goal of supporting current housing initiatives in those communities.

Once a community is approved for such funds, they will be restricted in terms of the way it can be used. HOME funding is subject to the following criteria:

It can be used to help tenants with rent assistance, home buyers with mortgages, and the rehabilitation of properties that will be used for rental purposes.

When applying to HUD HOME programs, funding for services such as rent assistance for families requires that tenants meet the criteria of having a low annual gross income.

If you wish to pursue a community upliftment initiative as a community, then the HOME program can help you with access to funding or grants.

3. The Fair Housing Assistance Program (FHAP)

The purpose of the Fair Housing Assistance Program or FHAP is to ensure that all individuals and communities have access to fair and affordable housing. It is a policy in which all persons, regardless of age, gender, or ethnicity, should be provided access to decent housing across the country. While this program doesn’t necessarily involve actual property developments, it does receive HUD funding to issue and pass certain regulations and laws concerning the housing sector. These regulations include steps to improve housing for all communities across the US.

Owing to the pursuits of this program and the dedication of those passionate about fair housing, many families have received the assistance that they need to access safe housing.

If you feel that you have been denied your basic right to housing, you can contact the Fair Housing Assistance Program for more information.

4. Homeless Aid

HUD programs that focus on homeless assistance are meant to help people living on the streets with resources such as access to shelters, temporary housing, and even rent assistance.

The purpose of these programs is to get as many people off the street as possible while providing information on where to go and who to contact when in need of temporary or permanent shelter. This can include requests for rent assistance or when a household with children is facing eviction.

HUD assistance extends to government organizations, charities, and state shelters across the country. The purpose of HUD funds issued to charitable organizations and agencies is to provide essential housing services and resources to individuals and families. This may include rent assistance and case management so that families can find the secure shelter that they need.

While HUD services are highly criticized concerning housing shortages and many people are waiting on Public housing or Section 8 homes for years, the funding that is given to homeless shelters has prevented families from living on the streets. Some of these services include temporary shelters, permanent shelters, and the provision of financial aid for the homeless. The agency has also played an important role in helping individuals and families with disabilities to find the appropriate housing.

Homeless person sitting on the side of the street
Everyone deserves a safe home to live in

5. Public Housing and Section 8

Two well-known housing programs offered by HUD services are an important part of residential assistance for individuals, families, veterans, seniors, and households with members who have disabilities.

Public Housing and Section 8 remain highly contended housing services in the US. With growing numbers of people looking for affordable rentals, these programs play a vital role in addressing housing inequalities.

While Public Housing and Section 8 may not always be located in desirable areas, there are many households that depend on these services to keep a roof over their heads.

Both housing programs are available for those on a low income and who meet HUD qualifying criteria. If you want to learn more about these programs, please visit our guides on Public Housing and Section 8 Services.

Qualifying for HUD Housing

To qualify for HUD Housing, you need to meet the following criteria:

  • Annual gross income must be less than the median income for the area/state.

  • Applicants must fall into the low-income housing bracket.

  • Must be a US citizen or meet specific immigration criteria to be considered for acceptance into a housing program.

  • Background checks will be performed and the housing agency may ask for references to determine your suitability as a tenant.

HUD Grant Applications

HUD grant applications are considered for charitable organizations including shelters and communities that wish to restore available shelters or rentals for local tenants. If you are an organization interested in applying for a housing grant, there are specific steps that you have to follow to be considered for funding. Depending on the program you are pursuing, you may need to register for a DUNS or Data Universal Number System or you can visit the HUD Exchange online which is a portal dedicated to charities, organizations, and related services seeking funding. It is best to contact the HUD by visiting their website for more information.

How HUD Services Can Help You

The goal of HUD housing is to help as many people as possible with secure and decent homes to live in. With millions living below the poverty line, both children and adults are at risk of ending up on the street and this is where housing programs that involve shelters, rent assistance, Public and Section 8 Housing play an important part. It offers both temporary and permanent aid especially for vulnerable households with children or members with disabilities.

Along with various HUD housing projects, the organization also helps homebuyers with access to affordable mortgages or loan approval to improve or repair their homes. If you need a small loan for house repairs and renovations but bad credit or income limits are preventing you from pursuing these finances, then the HUD FHA program is one of the ways you can pursue these ventures.

Happy painter
Revamping your home improves its value and it could be a fun DIY project

Depending on your needs, you can contact HUD services for all of your public and affordable housing questions.

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