Many investors in foreclosed homes in Michigan have a plan as to how they intend to profit from their foreclosures investment program. Some investors rent foreclosed homes in Michigan to tenants and building monthly cash flow. Some foreclosure investors prefer flipping houses. They purchase foreclosure homes at significant discounts, from a a variety of sources, including government foreclosures, HUD foreclosures and banked owned homes.
Most investors do not realize the existence of a government-housing program, which allows investors to sell foreclosed homes in Michigan to eligible families in the Housing Choice Voucher (HCV) program better know as Section 8. Administered by the local housing authority, this component of the Section 8 program, known as the Home Ownership Program, transform eligible participants in the program from renters to homeowners.
In a sluggish economic environment, it provides another tactic for investing in foreclosed homes in Michigan, and one investors flipping houses should consider as another aspect of profiting from foreclosures in their investment portfolio.
Selling MI Foreclosed Homes to HCV Recipients
To employ this strategy of flipping foreclosed homes in Michigan to HCV families, foreclosure investors need to understand the basics of the HCV Home Ownership Program and its criteria for families.
Conditions the family must meet to participate in the Home Ownership program include the following items:
• A first-time homeowner – no family member could have own or have an interest in the residence for the last three year.
• Has a minimum income requirement – adult family members who will own the home must cannot earn less than the federal minimum hourly wage multiplied by 2,000 hours.
• One or more members must have a full-time job and continual full-time employment for at least one year before receiving the home ownership assistance.
• The family must undergo home ownership counseling as required by the local housing authority, which includes information on purchasing a home, budgeting and pre-purchase home inspection.
• Housing authority determines family eligibility and issues a Home Ownership Certificate which allows the family to search for a home to purchase.
Families must meet other stipulations to participate in the Home Ownership program. Investors in foreclosed homes in Michigan, who plan to avail themselves of this avenue for selling homes, can use this knowledge to qualify perspective home buyers when flipping houses in Michigan.
How Payment Works
Investors in foreclosed homes in Michigan who already rent to families participating in the Section 8 already understand how payment works. Generally, families receive a voucher that permits them to seek housing for a specified number of bedroom. The number of bedrooms the family qualifies for determines the Payment Standard. The Payment Standard determines the maximum amount of the total rental payment, based on the bedroom size, a property owner can receive for renting to the family. This same formula determines the family maximum mortgage payment and other housing-related expenses.
The family must pay 30% of the household adjusted-monthly income. The federal government via the local housing agency makes the monthly housing assistance payment (HAP) based on the financial circumstances of the family.
Foreclosed Homes Must Meet Requirements
Investors who decide participate in this program must ensure their foreclosed homes in Michigan purchases meet HUD and housing requirements. These requirements include passing HUD’s Housing Quality Standards, basic requirements any dwelling rented under the Section 8 program must meet, and the housing authority conditions. The home must also undergo a professional home inspection.
Knowledgeable individuals or entities flipping houses in MI can place ads catering to this segment of the home buying market, which includes families relocating to the area from out-of-state. Contact the local housing authority to find out more about how to implement this program as part of your foreclosed homes in Michigan investment plan.