Urban Institute Publishes Brief on Using Vouchers to Support Homeownership

Date Published: 
May 31st, 2023

The Urban Institute has published a new brief on whether the Housing Choice Voucher (HCV) Homeownership Program can be used to address the racial homeownership gap. The researchers examined data on program use, rates of uptake, demographics, markets, and interviewed PHA staff and program participants. They also conducted quantitative analysis using HCV data, FMR data, Zillow Home Value Index data, and vacant housing unit data from the U.S. Census.

The HCV homeownership program allows HCV recipients that are first-time homeowners to apply their voucher to a monthly mortgage rather than to rental housing. Under HUD regulations, households are eligible to receive assistance for up to 15 years if they are nonelderly and nondisabled, or for the full length of the mortgage term if they are elderly (at least age 62) or disabled. PHAs also have the option of offering a one-time down payment assistance grant in lieu of monthly subsidies.

While researchers found no geographical patterns of program uptake nationally, homeownership vouchers are used more frequently in some places than in others. The states with the overall lowest uptake of homeownership vouchers as a percentage of HCVs are California, Kansas, and Alabama. The states with the overall highest uptake of homeownership vouchers are New Mexico, New Hampshire, and Vermont. Even among high uptake states, homeownership voucher use is still low both in volume and in proportion to overall active vouchers. Philadelphia and Chicago have the highest numbers of active homeownership vouchers in the country, at 465 and 405 respectively, but use fewer than 3% of their vouchers for homeownership.

Less than 0.5% of vouchers are used for homeownership, and roughly three out of four housing agencies do not currently support any homeownership vouchers. Only 22% of PHAs nationally are using any of their HCVs in the homeownership program, and among those that do, only a fraction of PHAs use a substantial amount of their HCVs for homeownership. Over half of PHAs that support homeownership vouchers use less than 2% of their vouchers for that purpose. Only four PHAs use more than 10% of their vouchers for homeownership; each of these PHAs has fewer than 1,200 HCVs and no more than 130 homeownership vouchers.

Places that offer the homeownership voucher program have about 41% Black non-Hispanic households in their HCV program, compared to 34% in places without a homeownership voucher program. However, the PHAs that use highest share of vouchers for homeownership tend not to have majority Black non-Hispanic clientele in the program.


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