patrick.net

Yes the schemes taking advantage of the corrupt welfare state are never ending.

I like the common andecdote of the 'doctor/rich guy with a $500 a month rent controlled beach apartment' (where market rent is 10 times higher). This is 'legit' I suppose since there is no income limit for rent control. Hilarious.

I suppose if someone is on rent control AND sec-8 the taypayers are saving money. At last a silver lining in communism!

There will always be someone taking advantage of these systems. It's not very different than someone abusing a tax loophole that is obviously not designed for their circumstances. It will always be there, whatever you put in place will be abused by someone somewhere regardless of the intentions. Whether it's a social program or a tax system. Whatever will minimize someones costs, they will use. These programs don't have to be "helpful" in nature at all either, they can be simply we're taxing this business at this rate and allowing these deductions. Someone from a different business comes along and realizes if they shoehorn their business into that model, they'll save a few bucks and they'll do it.

While some lawyer walked away with one instance here, there are probably a lot of people who genuinely are benefited from this program. The best program I've seen for getting people out of generational disparity was a program designed to mix them into better neighborhoods. While the parents didn't benefit, the kids did. This program probably helps a lot of families out as well as being abused by some.

I agree 'people benefit from free money'.

Everyone should always take all free money offered which is why I say to Nutter to BUY BUY BUY (with OPM of course).

And lets not forget CA is a non recourse state. Anytime he wants he can walk away and apply the s-8 voucher to any old rental. Its win win (unless he pours his own cash into it).

I would recommend to Nutter to try and put as little $ as possible into this deal and part of that is make sure to avoid a fixer and buy a newer/remodled home to minmize the maintenance bite.

If we were interested in a "fixer" there's a loan for that too.

http://www.co.san-diego.ca.us/sdhcd/homeowners/repair_loan.html

Having an inside look at these welfare programs for the past couple years I'll say one thing. They are NOT designed to help people better their situation. They are designed to keep people dependent on the government.

After marriage my wife lost alot of the programs she was on. At the time she told me we might still qualify for Medi-Cal, but I would need to attend a meeting with her from like 9am-1pm on Thursday. I told her there's no way I'm taking off in the middle of the week for something we might not even get. What kind of program forces people trying to better their situation to take time off work to stay on/qualify for it? I've had to remind my wife frequently over the past couple years that making more money is a good thing, because she had been made to believe that she needed the government aid to make it.

These programs create a class of state servants. They may help some, but the majority fall into dependence. I will be the first one in line the minute someone moves to end them, but until then I'll take whatever tax dollars back from the government I can.

TechGromit says

PockyClipsNow says

Are you people kidding? This is NO BRAINER this guy should BUY for sure. If prices go down he can walk away and buyer another one with sec-8 even cheaper. (I bet this program takes credit challenged people )

I never said he shouldn’t buy, it just that the numbers he was throwing up didn’t add up. First it was 350k, then 325k, 285k looks more doable.

Again, appreciate the help on the numbers. I agree the 300K range looks more realistic. We'll see once we get lender approval.

"Does this sound like a realistic scenario in this market for those areas of San Diego? Appreciate any input."

Ah NO!

no it doesn't Fact is it would be cheaper on month to month costs to recieve section 8 rental help than any half wit brained up Idea I've heard here. you people are smoking the house crack.

this whole post is a pie in the face on what this blog stands for imo. and what has happened over the last five years.
nuttboxer your making this crap up IMO.

plus you're posting and talking about basicaly what amounts to Tax evasion as far as i can tell.
not too smart.

so if you don't have the cash rent. beause you'll be better off. The Va jay jay will not be happy and she'll keep telling you to get you shit together,....maybe you should

I'm all for helping but, REALLY?
REALLY? are you for F@%King real?

After you buy this house, after a few months, you should try to get a loan mod. They can reduce interest rate to 2% for 5 years (standard deal) and put part of principal on 'back of loan' which means the payment is not based on the full principal owed. They try to get your payment down to 31% if 'declared income' I think.

Serisouly you already are able to document low income to qualify for a s-8 vouchers. So after buying this house you should also qualfiy for a loan mod possibly. Tell them 'your expenses have gone up' for medical, insurance, food, whateva.

It seems crazy but why wouldnt this work? (Then when prices go up flip the house, buy gold bars, and bury them to hide the assets? im not sure how to cash in here and keep on welfare.)

This is fun thinking up ways to get free money. This article inspired me.

http://www.zerohedge.com/article/entitlement-america-head-household-making-minimum-wage-has-more-disposable-income-family-mak

I can respect your right to privacy.

My point is that a program such as what you are describing has income restrictions.

My experience here on the east coast is that the restrictions are such that, if you can afford to buy a home, you make too much to qualify for the assistance.

I'm not trying to be critical. I'm just pointing out the inherit flaw in the system.

To be eligible for these programs, you need to be eligible for section 8 (which you already are)
section 8. Section 8 has a maximum income.

http://portal.hud.gov/portal/page/portal/HUD/topics/rental_assistance/phprog

Maximum income limit for a family of four in the San Diego area is $62800.
http://www.huduser.org/portal/datasets/il/il10/ca.pdf

I can see where the $1800 limit is coming from and the math works better than I thought.
($1800 x 12 / $62800) = 34%. Assuming no other monthly debt (no car payments, no student loans, etc.) this is on the upper end of the house payment / gross income ratio.

Previous posters have commented on "how much house" you can get for $1800/month.

I'd be interested to know how much of the $1800 is covered by this voucher?

The question you need to ask yourself.
1) How much can $1800 REALLY buy [See posts by others]
2) What happens if this program suddenly goes away? [no longer funded, expires, etc.]
Can you still make the projected payments?
3) what are the other costs that you may have overlooked and/or underestimated (utility, repairs and upkeep, furnishings, etc.)

whatever you decide, best of luck.

I wasn't assuming you were being critical, just try to keep as much of my life private as possible. I've got a better handle on what the $1,800 will cover(not a $350K loan). As far as our end I know what it would be based on current rental portion, but I've heard from the Sec 8 rep that it could be lower to help us save extra money to cover the common costs of home ownership(repairs, maintenance, etc).

As for the program going under, it's more likely we'll be out before that happens, since we'll no longer qualify for Section 8 when my wife goes back to work.

Thanks for the advice!

PockyClipsNow says

After you buy this house, after a few months, you should try to get a loan mod. They can reduce interest rate to 2% for 5 years (standard deal) and put part of principal on ‘back of loan’ which means the payment is not based on the full principal owed. They try to get your payment down to 31% if ‘declared income’ I think.
Serisouly you already are able to document low income to qualify for a s-8 vouchers. So after buying this house you should also qualfiy for a loan mod possibly. Tell them ‘your expenses have gone up’ for medical, insurance, food, whateva.
It seems crazy but why wouldnt this work? (Then when prices go up flip the house, buy gold bars, and bury them to hide the assets? im not sure how to cash in here and keep on welfare.)
This is fun thinking up ways to get free money. This article inspired me.
http://www.zerohedge.com/article/entitlement-america-head-household-making-minimum-wage-has-more-disposable-income-family-mak

In Southern Cal think of an illegal who's wife/girlfriend is a resident with kids. $15 an hour in construction goes a long way when there's no taxes, and big brother is paying almost all your expenses.

NuttBoxer says

In Southern Cal think of an illegal who’s wife/girlfriend is a resident with kids. $15 an hour in construction goes a long way when there’s no taxes, and big brother is paying almost all your expenses.

Illegal haha! this is how legal residents have to get by in Cali bro, off the books for sure. this isn't even my take I've witnessed this.

you can't pay your first employee on the books in Cali in any buisness ,.. and make it.

The kid helping your "got to have my F##king granite counter" installer. or "i need a glass shower door to feel like I've made it in life" installer, or the" I just spent my kids college money on a red upright washer and dryer and my old one worked fine" installer. he is being paid $12-15 cash.

There are several different Section 8 programs with vastly different income/asset requirements - we don't have enough information to know which program Nuttboxer is on. Nor does it matter. So far as asking:

EastCoastBubbleBoy says

How much do you earn “on the books” and how much do you bring in “off the record”.

That's a fairly offensive question - it assumes that Nuttboxer is scamming the system. He is fortunate enough to qualify for this assistance, the theory of which really isn't much different than farm subsidies or corporate welfare, and he wants to purchase a home. Now he's attempting to educate himself on the process. Considering that the waiting list for Section 8 housing programs can be upwards of ten years, and that qualifying for the purchase programs isn't easy, Nuttboxer sounds like he's taking advantage of a program designed to help him rather than to scam the system.

NuttBoxer says

The way this program works, we pay the same whether we rent or buy, so besides the downpayment, we don’t put any more of our money in then we would anyway.

Don't forget upkeep and replacement of appliances, etc as they go bad. It's not necessarily that expensive on an ongoing basis, but if one thing goes wrong it can hit you hard.

NuttBoxer says

We’re thinking of having a family member co-sign to boost our chances/approval amount. We can have them just co-sign the mortgage without being on the deed right?...Also forgot to ask, if someone co-signs the loan with us, does that make them a part owner of the house?

From my experience (working in title company years ago), if you get someone to co-sign the mortgage company usually requires that they be included on the deed. Remember that you're asking someone to promise to pay the note IN FULL if you don't pay - they'd be crazy not to want to be on the deed too. It preserves their financial position somewhat.

Tenouncetrout says

You’ll need a W2 from the same company for more than two years, with no lapse in employment

Not really, because this is a government insured program. It's a bit different.

PockyClipsNow says

you should have married in name only (and consider a divorce so you can really rake in the cheese! Shacking up and having wife on welfare is what the smart money would do? Am i wrong?).

Perhaps I missed it, but I didn't see anywhere that Nuttboxer wished he wasn't responsible for paying anything. He did mention that, if he loses his job, the payment would still be made due to the S8 subsidy. In this economy, losing one's job is a valid concern. He has a backup plan - one that's not available to most of us. But he has one.

PockyClipsNow says

After you buy this house, after a few months, you should try to get a loan mod.

I doubt the S8 program would allow for this - nor would the mortgage company go for it. It sounds like he's trying to buy a house, not scam the system.

Nuttboxer, for the typical buyer many of us believe that now is a crappy time to buy. But in your case, it sounds like you'll do okay if you do your homework. Try not to take the comments personally - there are legal ways to do so without as much risk. If you feel good about it, do it. But IMHO it's not a "go" on the co-signer thing. Good luck.

Thanks for the info on the co-signer, that will definitely affect who we ask if we need one.

I don't take the comments personally since I've been on both sides. There are people who game the system(in any system), and those who use it to better their families situation. With so much dishonesty in housing and government, everyone looks for an angle.

I think you're right on the loan mod. For one the downpayment/closing assistance loan has to be paid in full if you refinance. Maybe this is not the same thing though? Like the post says, first time home buyer.

on the loan mod, it seems that he's saying tht you should claim you can't pay and get a loan modification based on lower income. doesn't make sense.

PockyClipsNow says

After you buy this house, after a few months, you should try to get a loan mod. They can reduce interest rate to 2% for 5 years (standard deal) and put part of principal on ‘back of loan’ which means the payment is not based on the full principal owed. They try to get your payment down to 31% if ‘declared income’ I think.
Serisouly you already are able to document low income to qualify for a s-8 vouchers. So after buying this house you should also qualfiy for a loan mod possibly. Tell them ‘your expenses have gone up’ for medical, insurance, food, whateva.
It seems crazy but why wouldnt this work? (Then when prices go up flip the house, buy gold bars, and bury them to hide the assets? im not sure how to cash in here and keep on welfare.)

In other words, lie. use the gob'mint to buy the place, then lie & have them reduce your payment further. It prob wouldn't work because S8 is helping out. This train of thought assumes that you want to scam the system rather than to use the legal program to your advantage.

If I were you I wouldn't rush into any housing programs. The longer you wait in this market the better your financials will most likely be.

I could be wrong of course. But the way I see it...
1) Usually people buy houses in their late 20's early 30's or so. But when entire generation of folks has been crashed on by housing bubble they no longer can get into such a market.
2) New generation graduating with an insane educational loan debt - they aren't likely to be going into housing market with debt either.
It all adds up to free market economics of housing going down. Unless of course our government will find another creative way to redistribute wealth and create another bubble again.

Wait a few years, market will make more sense, 30 year loans will go away since those won't work for anyone anymore. New standard will most likely be 15. Prices will probably be more reasonable as well. California for example is still a bubble.

Hope this helps.

TechGromit says

The “fad” of 30 year mortgages have been around since 1938, I highly doubt they will be going away any time soon. the Prices of houses will not continue to fall forever, when the cost of buying is cheaper then the cost of building new homes, I’m sure you’ll see the market quickly stabilize again, as the existing inventory of vacant housing is used up. No matter how far the market falls, the cost of building a house is excessive, even if you build it yourself. 30 year mortgages are here to stay.

I know that Gromit. However situation today is very different. Since 1938 people who were getting 30 year loans weren't that old. In today's situation anyone who can afford it is mostly in their 40's (since generation that was able to afford housing got really screwed with the bubble debt). When most of the market is in that age bracket, they aren't going to go for 30 year loans, since there is 0 guarantee of income after the age of 56 or so. (don't remember exact).

Of course I also think that actually is good. Because we will no longer tie up good capital in fake bubbles which have to burst eventually revealing the hollowness. If all that capital gets used in means of production, we can truly pull this nation out of the hole. It's a good thing. :)

Only thing that worries me here is that FRE/FAN are still around as well as FHA. These artificially drive prices up forcing more good capital to be tied up in unnecessary debt consumption royally screwing this country's GDP.

elliemae says

on the loan mod, it seems that he’s saying tht you should claim you can’t pay and get a loan modification based on lower income. doesn’t make sense.
PockyClipsNow says

After you buy this house, after a few months, you should try to get a loan mod. They can reduce interest rate to 2% for 5 years (standard deal) and put part of principal on ‘back of loan’ which means the payment is not based on the full principal owed. They try to get your payment down to 31% if ‘declared income’ I think.

Serisouly you already are able to document low income to qualify for a s-8 vouchers. So after buying this house you should also qualfiy for a loan mod possibly. Tell them ‘your expenses have gone up’ for medical, insurance, food, whateva.

It seems crazy but why wouldnt this work? (Then when prices go up flip the house, buy gold bars, and bury them to hide the assets? im not sure how to cash in here and keep on welfare.)

In other words, lie. use the gob’mint to buy the place, then lie & have them reduce your payment further. It prob wouldn’t work because S8 is helping out. This train of thought assumes that you want to scam the system rather than to use the legal program to your advantage.

Ahh, I see. I ran it by a friend in financing and he said wouldn't work since Sec 8 is very restrictive with what you can do under the program.

Nomograph says

You seem like an articulate and educated person. As a husband and a father, your number one priority should be to keep your family *off* welfare, instead of looking for ways to get *on* government assistance.
I would never, ever, in a million years voluntarily place my family on welfare unless it was a matter of survival. It would be an embarrassment that I would not be able to live with. But that’s just me, and I was raised with a different set of morals and values that some.

My wife was on assistance when we married. For her it was a matter of survival since she was a single mom trying to finish college. Buying a house doesn't put us on welfare any more than we currently are(section 8 rental - section 8 homeowner). I would think someone who makes over $50k a year should be able to support a family on that, but at least in California, this means you're "poor" and still qualify for a number of welfare programs.

Maybe the embarrassment should be California's that someone making that kind of money can barely get by in their state.

NuttBoxer says

Maybe the embarrassment should be California’s that someone making that kind of money can barely get by in their state.

Move then! Even though you're stealing from all of the US taxpayers with this section 8 home buying nonsense, we don't need anymore takers here in CA. I'm sure that Mississippi or Alabama would love to have you.

Funny how I never hear anyone speak of living way under their means and saving for a home.

lurking says

NuttBoxer says

Maybe the embarrassment should be California’s that someone making that kind of money can barely get by in their state.

Move then! Even though you’re stealing from all of the US taxpayers with this section 8 home buying nonsense, we don’t need anymore takers here in CA. I’m sure that Mississippi or Alabama would love to have you.

Hey now. I lived in AL and I can tell you, they don't take kindly to section 8 system gamers. This stuff wouldn't fly down there.

This whole conversation makes me really tired. Every time I try to console myself with "maybe we have finally learned a lesson," the same old crap keeps rearing it's ugly head.

So I point out that we live in a MASSIVE welfare state(more welfare programs than any other state in the US), that causes families with a stay-at-home parent to be classified as "poor" and your response is to defend our dear leaders in Sacramento!? I guess working towards reducing the ridiculously inflated cost of living here by cutting back bureaucracy, and eliminating the unions that control every election and live off our labor would be too much work, so you prefer to throw stones from the sidelines. Unfortunately, that attitude is exactly why California is on the verge of becoming the first state in this country to go bankrupt.

And don't worry, the aid we receive directly from Section 8 all comes out of my pocket, since after subtracting taxes every year, I end up back at zero. Of course your taxes are still paying for the Section 8 workers, directors, HUD, and a million other unnecessary bureaucrats in San Diego, Sacramento, and Washington. But throwing stones at your neighbor is easier than blaming your government I guess.

like Zombies they keep on coming. even I'm thinking that I need to rent the money to "own a home" so I can "get a life" and "have a future."

Nuttboxer has the right attitude. Everyone who can possibly qualify for gov cheese should take it (and then some). The faster we can get CA into Bankruptcy court the better off the state and the nation and the world will be.

Here is why: we NEED HIGHER INTEREST RATES desperately to crash housing further (making it more affordable for all) and also savers should not be robbed with 1% CD rates to pay for bank bailouts. A default/haircut on CA bonds and muni bonds should cause a rate spike. Right?

How the hell can int rates be this low with debt levels (chance of default) so insanely high? Its screaming a red flag for something....risk? isnt it?

Also people do not realize the HUGE amount of folks on S-8 in CA. It keeps rents REALLY HIGH. These horrible crappy apartments in the worst part of the ghetto will be $800 a month. Why so high? because everybody is on S-8. Its drives up rents like Freddie/fannie/FHA drive up house prices.

So people that are poor have no choice but to use S-8 since rents are high (due to s-8). Thank you liberal retards for making it impossibly expensive to live without handouts for millions.

This should make Katy happy, we've decided to wait another year before we buy. We'd prefer to save up our own downpayment first, and possibly buy in Tijuana(my wife's hometown) where housing is more reasonable. In the meantime we'll be looking into reducing our rent(we're currently over our voucher, which means we pay the difference), and looking into other opportunities to build our savings. Thanks to everyone who contributed hard numbers to help me get a better grasp on what buying will cost, and what we can afford.

It's hard not to get into the politics and ideas driving our current market when we talk about this stuff, and I tried to resist, but when something isn't right, sometimes you just have to say it.

Katy Perry says

Funny how I never hear anyone speak of living way under their means and saving for a home.

Most Americans think the other way...Get into debt of the lifetime and then use the house as a piggy bank to generate free money, sitting on the couch and using the calculator. :)

This is why welfare doesn't work as well anymore. Once the stigma is gone, then folks are looking for a way to stay on it rather avoid it or get off it quickly.

Strategic foreclosures are rising for the same reason.

Nomograph says

You seem like an articulate and educated person. As a husband and a father, your number one priority should be to keep your family *off* welfare, instead of looking for ways to get *on* government assistance.
I would never, ever, in a million years voluntarily place my family on welfare unless it was a matter of survival. It would be an embarrassment that I would not be able to live with. But that’s just me, and I was raised with a different set of morals and values that some.

These conditions exist as a part of our fiat currency, fractional reserve, debt system. The government is used as a platform for the banks who brainwash us into thinking debt and government dependency are the only way to live. Then when we're all up to our eyeballs in debt, and relying on the government for our clothing, food, and shelter they pull the rug out. Through cycles of inflation and deflation all the wealth is transferred from the general population into the hands of those who control the system. Debts become untenable, and the population is reduced to an army of slaves who's only purpose is perpetuating the system for those on top, who contribute nothing, but own everything.

Wait... This sounds a little too familiar.

Zlxr says

If poor people don’t use the system - the rich will (they do anyway) so what are you all screaming about?

I do have a problem with that - the programs are there to help people better themselves and hopefully get off welfare someday. It's hard to fake being poor - I'm thinking that this person's family gave them money and they got off S8 that way. Either that or they borrowed 'til they dropped, like so many other people.

S8 is a federal program - and the (voucher) program that Nuttboxer is on sets the market rent, figures out the renter's share of that, and then tells them how much their share is. If their share is determined to be $500 and then housing pays $1000, they can get a place for $1,200 and only pay $200 out of pocket. If they get a place that costs $2,000 S8 pays $1,000 and they pay $1,000.

The housing authority (or program administering the federal program locally) does require annual recertifications where the renter proves his/her income - but they're not allowed to ask where the difference between what they figured the renter can pay and the actual rent comes from. I've seen drug dealers, house cleaners and other under-the-table income sources that allowed the renter to pay 2-3 times over the amount of the subsidy.

The voucher program will pay 30% of the adjusted gross income toward rent with a maximum amount for the total rent - so it's not possible to move to another place and pay more out of pocket for the difference.

Both of these programs have long waiting lists in most areas (altho some small towns, or specialized programs allow for moving to the top of the list). There are other programs too, ones that are administered by non-profits, etc.

elliemae says

Tenouncetrout says

You’ll need a W2 from the same company for more than two years, with no lapse in employment

Not really, because this is a government insured program. It’s a bit different.

I'll eat my hat if he gets a house, if his story is as told.

FHA loans is a "GOVERNMENT insured program".

The woman at the Title company told me I lucky the deal went to fruition. She said only about 1 in 20 applicants that "Qualified" in the initial stages, makes it to Closing.
She suggested I never refinance, that the FHA deal going around right now is even better than the VA loans. The legal protection in the FHA loans are so stringent that it is impossible for the bank to change terms, even due to payment history. And almost just as hard to be foreclosed on. With all of these protections, for the loan recipient, they make damn sure they'll be able to pay it back. Which is why they are very selective who they actually sign the check for. Even though they initially qualify on paper.

If it weren't for the fact that FHA loans are the bulk of the houses being sold(Private funding is even tougher to get) then Realtor would totally ignore buyers seeking to buy with FHA financing.
Which was the case a few years ago, when more people were still getting loans with conventional loans.

FHA loans are HUD loans, I was sent HUD and FHA disclosures almost every day while I was waiting for the house to close.

These loans are such a pain the ass get, that it is easy for anyone not White to pull this card...

http://www.businessweek.com/ap/financialnews/D9K00VJO0.htm

Nomograph says

NuttBoxer says

The government is used as a platform for the banks who brainwash us into thinking debt and government dependency are the only way to live.

You’ve brainwashed yourself.
Normal people don’t believe that government dependency are the only way to live. If I were you, I’d forget about welfare and join the rest of us.

I'm sure you were screaming for Washington to do something along with everyone else when they talked about AIG going under. If you believe in the FDA, DHS, IRS, FBI, or any other 3 letter acronymed government agencies then you are dependent on the government. If you believe in Social Security, or medicare, guess what? Dependent on the government. Don't feel bad, most "normal" people are in the same boat. The normal you want to believe in, hardworking Americans who want to live free and be left alone(by the government), is mostly gone. Otherwise most of this mess never would've happened.

There's a difference between using the system with understanding, and being used by the system without recognition.

I'm a foreclosure counselor....you might as well make your appointment now! If you have no savings, you will not be able to sustain that mortgage payment.

I guess 'medicaid fraud' is more common for the wealthy to 'take advantage of'.

Those stories arent quite as fun as 'obese fat kat bankers using food stamps meant for the starving'.

Here is one:

http://www.nypost.com/p/news/local/millionaires_welfare_con_50topBdKL0y5HfYYlQ0jzK

Nomograph says

If you want to be a good husband and father, you job is to get your family *off* welfare.

That's quite a statement coming from a leftist. Are you saying everyone that is on welfare isn't a "good husband and father?" It's amazing how often and easily the hypocrisy of the left is exposed.

Move to Minnesota! :-D

you were looking at homes in San Diego in 2010, qualified for section 8 voucher, ie assistance to buy at the literal bottom point ever, and didn't do it???

holy shit, what a horrible decision!

your complete lack of balls really hurt you!!!!!

Wait what?

"Section-8 Home Ownership Program" - Seriously, that exists?

Why do you think he's always ranting and raving about how it's all a big scam now? He's gotta find some way to swallow the huge mistake he made.