To meet the 25% low-income set-aside requirement, can the local housing authority construct housing using NSP funds and provide Section 8 residents the opportunity to become first-time homebuyers using the Section 8(h) Homeownership Program? Is it permissible to limit the homebuyers for these units to Section 8 residents?

Date Published: October 2012

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Yes and yes. There is no HUD rule that prohibits a preference for persons participating in the Section 8 program. However, grantees must be in compliance with Fair Housing laws and ensure that the preference for Section 8 households does not have an unintended discriminatory effect. Grantees considering this arrangement should contact the Fair Housing and Equal Opportunity (FHEO) officer in the local HUD Field Office to ensure that the preference is not having an unintended discriminatory effect and thus violating Fair Housing laws.

Tags: NSP Program Requirements - 25% Set Aside