Section 8 Housing
Tenant: "I told the property owner that I qualified for a Section 8 voucher, but he said he does not accept my 'types'. Is that legal? Owner: "A prospective tenant told me they were Section 8 approved. Even if they pass my credit and criminal screening what would I be getting myself into?"
The Problem: There are many individuals and families who have a difficult time meeting the rents in the area where they are employed. Often they are in a situation where the majority of their income has to be applied to rent, which didn't leave them much for other essential needs. Recognizing this ongoing reality the federal government has stepped in to assist those who qualify, to stabilize their living situation which, in turn, enables them to have a more acceptable standard of living. The applicable housing laws, though, are always changing as situations demand.
HUD - Housing and Urban Development - is a federal program with the mission to: "create strong, sustainable, inclusive communities and quality affordable homes for all." It's origins date back to the 1930's when various Housing Acts became Federal law. Foundational to HUD is the Fair Housing Act prohibiting discrimination in housing because of race, color, national origin, religion, sex or handicap.
HUD has different programs designed for different needs.
- Public housing are buildings owned by the government. The rent in public housing is usually calculated at 30 percent of income if utilities are included.
- Section 8 refers to privately owned buildings where low-income tenant rents are subsidized by the government and paid directly to the respective landlord. The amount subsidized depends on the particular property, the maximum allowable government subsidy, and the market rental rate in that area. Most households will be required to use 30% of their adjusted income for Section 8 housing. Deductions are based on the number of children under age 18, full-time students, medical and disabilities expenses, and for household members who are disabled and/or elderly.
The largest Section 8 program is the Housing Choice Voucher program, created in 1974 as yet another amendment to the 1937 Housing Act. Section 8 programs may be either 'project-based' (limited to specific apartment complexes) or 'tenant-based' (where the tenant may used the voucher any place in the country with a Section 8 program, to rent either a single-family home, townhouse, or apartment where the owner is willing to rent under the program - meeting, of course, its minimum standards of health and safety). HUD conducts an annual review of the Fair Market Value of rents as well as for utilities to determine and update their guidelines. The voucher may, in some cases, be used to purchase a home.
In 2008 HUD also began a new housing program, VASH (Veterans Affairs Supportive Housing), that uniquely catered to homeless and/or otherwise vulnerable US veterans.
Section 8 Tenant Qualifications
- US Citizenship or those with an eligible immigration status
- Family income must be less than 50% of the median income for that county, though, by law, the Public Housing Administration (PHA) must provide 75% of its vouchers to those earning less than 30% of the county's median income.
- Since the demand is often greater than the supply, each PHA may establish a preference priority that fits their community needs best. Thus qualification may differ from community to community. Funds for Section 8 vouchers are limited.
- You will need your birth certificate or drivers license, social security card, and tax returns.
Tenant Selection of a Section 8 Approved Home
- Tenant with an approved voucher is advised on the type of housing they are eligible for.
- The tenant selects a residence and ascertains whether or not the owner will choose to participate in the Section 8 program.
- The PHA then determines if the prospective residence meets their criteria for health and safety, and if the rent is 'reasonable'.
- The tenant must be willing to pay at least 30% of their adjusted income towards the rent, but no more than 40% - which sometimes occurs if they have chosen a place with a higher than 'reasonable' rent.
- A one year lease agreement is signed by the tenant, the qualified agent(s) representing HUD, and the property owner.
- The lease may be terminated by the PHA if the owner fails to meets the agreed upon conditions.
- The property is inspected by the PHA annually. The tenant's income is reviewed annually as well.
- The voucher is designed to be transportable if the tenant must move. The PHA must first be notified.
Owner Participation in Section 8 Housing
If you are an owner who may be interested in renting to tenants with a Section 8 voucher, contact your nearest Housing Authority to learn what the local requirements will be.
The Obvious Advantages
- Tenants are income screened before being approved for a Section 8 voucher
- You may also screen each Section 8 tenant - doing a criminal background check
- There is almost always a waiting list of potential Section 8 tenants
- HUD adds participating properties to their website which lowers your advertising expenses
- You will receive the larger portion of your rent consistently and on time.
- Tenants who don't live up to their Section 8 agreements can lose their voucher privilege.
- Your rent will need to be close to the median rent for your area.
- If your rent is higher than the median, the tenant will have to pay more, but will not be permitted to use more than 40% of their income.
- Your responsibilities as a landlord remain the same.
- Your property will be inspected annually to make sure it meets all health and safety requirements.
- Your property must be vacant for the first inspection. A HUD issued inspection checklist will be followed.
- Sometimes the required improvements may be costly.
- The government gets even more involved in your property management business.
- The eviction process, when necessary, is more complex.
The Law Re: Section 8 Tenant Applications
- Many states make it illegal to refuse to rent to a prospective tenant simply because they have a Section 8 voucher.
- On the other hand, if the landlord's own credit and background check raises legitimate red flags, the Section 8 voucher holder may usually be rejected.
* The above discussion should not be assumed to replace sound legal advice regarding Section 8 housing. Please be sure to contact your local PHA for specific advice for your local area and needs.