Section 8 has been around for over 70 years. In 1937, Congress created a program that would help subsidize housing for low-income families. The overall program was officially known as the "Housing Choice Voucher Program" - Section 8 gets its name because it is that section of the Housing Act that authorized it.
Although the federal government provides the money, it is administered through local housing authorities.
The program provides payments of rent to the landlord on behalf of a tenant that qualifies.
If you are a landlord and would like to participate in the program, all you have to do is contact the local housing authority and let them know. There is no formal application process for the landlord, however if you are a tenant applying, you must show that your income is below fifty percent of the median income for the geographic area you want to live in.
There are several advantages for landlords who take part in the Section 8 program:
• You will receive a steady stream of prospective tenants, which translates into lower vacancy rates and more signed lease agreements.
• You will be guaranteed income.
• Your monthly rent stipend will arrive in a timely manner - like it should in accordance with your lease agreement.
The benefits are more apparent than the potential disadvantages.
Section 8 is only the means through which the landlord is receiving part of the rent. The downfalls to the landlord who participate in Section 8 are the same as signing a lease agreement with any other tenant. It is still incredibly important to screen your tenants thoroughly.
How much does the government subsidize?
The size of the payment a landlord receives for Section 8 depends on a number of variables. The local housing authority will pay out what they consider to be "fair market value" based on the following: apartment location, size of the unit, amenities available, as well as the income of the prospective tenant.
Once that has been calculated, the difference will be paid to the landlord directly from the tenant. Usually, the landlord will receive payment from their local HUD office between the 1st and 7th of the month. However, the landlord will collect the tenant's share of the rent in the same manner as he would for any other tenant as stated in the lease agreement.
All properties that sign up to collect Section 8 payments must be inspected by the city to make sure it is in rentable condition. The specifics of the inspection can be found by asking your local housing authority. Any property that will be used for Section 8 housing must be properly inspected to be sure it is in suitable condition to be rented.
Sometimes the agency will rely on the local code inspection or a "Certificate of Occupancy" inspection. Other times, they may send their own inspector to do an in-person check up. They will do a fairly basic inspection that includes: checking to make sure all utilities work, a/c and heat work, paint is in good condition (not peeling), no leaks in roof or plumbing, no cracked windows or doors and finally making sure there are the proper smoke alarms and fire extinguishers.
After the landlord has rented the unit, he can usually use one of his own lease agreements, though in some instances, the local housing authority may require you to use one of their lease agreements. The biggest difference is that with a Section 8 tenant, the landlord is required to rent for a fixed term of one year - if he uses his own lease agreement, he can opt for a month to month lease.
What about security deposits?
Because everything in this tenancy is the same as with a regular tenant (aside from a portion of the rent coming from the government), the landlord is still entitled to ask for a security deposit. Remember, you must adhere to the local laws as far as the maximum amount that can be collected.
What about rent increases? Are these allowable?
Whether or not you can do this depends on the amount of rent determined by financial and geographic data: the location of the unit, the number of tenants in the unit, local area wages, as well as the types of amenities offered.
Even if a landlord wants to put an increase into the lease agreement, he will have to have it approved by the local HUD office. They may or may not approve it, which means their payment will remain the same and the tenant would be responsible for the rent increase. And if your property is in a rent-controlled area, you will be subject to those laws as well.
Is evicting a tenant on Section 8 easy to do?
Regardless of the fact that they are on Section 8, the courts do not see this as any different than a regular paying tenant. They can be evicted for non-payment of rent or other lease agreement violations.
Final tip: if you are interested in applying for Section 8 as a landlord, try to establish a relationship on a name to name basis with someone at your local HUD office. If they remember you, they may be more likely to send a qualified applicant your way - leaving you with no shortage of potential renters!
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