The Department of Housing and Urban Development’s Housing Choice Vouchers program (HCV), generally referred to as Section 8, provides low-income families with subsidies to help them acquire private market rental housing. Some property owners love Section 8, while others want nothing to do with it. To help you decide if it’s right for you, here’s a landlord’s guide to Section 8.
Designed to help low income families, your local Public Housing Authority screens recipients to determine whether they are eligible for the program. The parameters are primarily income-based, however individuals with criminal records are sometimes excluded as well. Under the tenets of the program, participants are provided with vouchers to help them secure quality housing.
The Housing Authority surveys the area in which your property is located to determine what is a reasonable rent, then provides the family with a subsidy to cover that amount — less 30 to 40 percent of their total income. The family is required to pay the difference to you directly, along with the security deposit and utilities (unless you cover utilities for all tenants). Housing Authority rent payments are mailed directly to you and are usually timed to arrive on the 1st of the month. Some of these regulations may vary from state to county, so be sure to read up on your location's rent control laws. We've made a rent control cheat sheet for the San Francisco Bay Area for free.
Apartments, houses, condominiums and duplexes are all eligible. To qualify for the program, you must submit an application to the Housing Authority and your property must pass an inspection to ensure habitability. Additionally, it must pass this inspection annually to continue to qualify.
HCV-eligible properties must have more than one exit in case of fire. Kitchens must contain a stove, a refrigerator and a sink with hot and cold running water. Food storage, prep and serving areas must be included, along with waste disposal. Living rooms and bedrooms must have at least one window and two electrical outlets. Kitchens must have at least two electrical outlets as well.
Air circulation must be adequate and the dwelling has to be free of sewer gas, carbon monoxide, dust, fuel gases, lead-based paints and other pollutants. Bathrooms are required include a flushing toilet, a permanent tub or shower with hot and cold running water, and a permanent washbasin with hot and cold running water. Screens and locks must be provided for all exterior doors and windows, and the structure has to be well maintained with a watertight roof.
While the Housing Authority provides basic screening of participants, you should still conduct your regular screening process to ensure the suitability of the family for your particular situation. Here, it should be noted all of the guidelines of the Fair Housing Act apply, so you cannot take race, gender, color, national origin, sexual preference or familial status into consideration. This may differ depending on your areas rent control.
Participating families are obligated to abide by your lease agreement, as would every other tenant and they are subject to all of the same rules, including eviction, should it become necessary. The Housing Authority inspects the unit at move-in and at move-out to hold participants responsible for any damage they may have caused the unit. Along the same lines, you are bound to treat participants with the same care and respect you show non-subsidized tenants. All rent increases must be channeled through the Housing Authority for approval.
With HCV renters, the majority of the rent is guaranteed every month. The Housing Authority lists your property for free, which cuts down on your advertising costs and you open your property to a wider pool of potential tenants.
On the other hand, some HCV participants might be less inclined to take care of the property because they don’t have as much invested. While this is somewhat offset by the annual inspection, it can still be an issue. You do retain the right to conduct your own screenings however, and you are not required to accept someone just because they have a HCV.
Additionally, because you’re dealing with a governmental entity, you have an additional layer of complexity to deal with as you must submit to annual inspections and you have to get approval for rent increases. While the rate isn’t dictated per se, you do have to make sure it’s competitive for the area. As you can see, there are definite pros and cons to working with HCV recipients, Hopefully, this landlord’s guide to Section 8 will help you decide whether or not the program makes sense for you.
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