Section 8 Housing, or the Housing Choice Voucher Program, is something that mystifies some and frustrates others. In a nutshell, it is a federal program that provides housing for those with low income, including the disabled and elderly.
Is Section 8 Housing limited to a particular district?
Essentially what the program does is help provide housing for those groups that qualify by paying their rent on apartments or homes. These properties can be anywhere, so it’s not just limited to the various subsidized housing projects. Public housing agencies administer it locally in the markets where you find it. This makes it easier for those agencies to be sure that the tenants and residences that participate are appropriately certified.
It works by allowing low-income families to choose from privately owned residences. For landlords and property managers participating in the program, the difference between 30 % of that household’s income and the public housing authority’s (PHA) payment standard is met. This is typically somewhere between 80-100 % of the fair market rent.
Landlords or property managers who wish to participate in the program have to offer reasonable rents under the program’s standards. Those in the program are able to choose properties with a higher rent than the fair market amount, but then they pay the difference themselves.
Can any rental home qualify for Section 8?
If you’re thinking about being able to accept the Section 8 vouchers, there are a few things you should know. First, a governmental agency or the local public housing authority will inspect your property to ensure it complies with the quality standards set about by HUD. Landlords are expected to provide sanitary, safe housing at reasonable rates, and those standards have to be kept as long as the owner is taking payments from the program.
When a family is eligible for Section 8, typically, they are placed on a waiting list. The amount of time on that list varies depending on the local market. There are different standards by which voucher program applicants are chosen from waitlist to waitlist in different municipalities.
Some of the most common requirements are:
- A stove or range for cooking
- Kitchen sink with both hot and cold water
- A refrigerator that is of suitable size for the rental unit
- Alternative exits for fire safety
- Food preparation and storage area
- Services and facilities for food waste disposal
- One window per sleeping and living room
- Working light fixtures in the kitchen and bath
- Minimum two outlets in the living room, bedrooms, and kitchen
- Free from harmful air pollutants, with adequate air circulation throughout
- A toilet that flushes
- A tub or shower that has both hot and cold water
- Fixed basin for hot and cold water
- Kitchen, bathroom, living room, minimum one bedroom or a living/sleeping room
- Exterior doors and windows screened that can be accessed from the exterior
- No major defects
- A weather-tight, firm roof
Are Section 8 rentals advisable for landlords and property managers?
Approving your property for Section 8 Housing can be a lengthy and somewhat stressful process. There is so much paperwork involved and inspections to deal with it can almost seem like it’s not worth it. But just like any other venture, there are pros and cons involved.
For those still unsure of what it is, Section 8 Housing is a federal program that assists veterans, the elderly, the disabled, and low-income families in finding safe and adequate housing. This means that the Public Housing Agency (PHA), which works under the Department of Housing and Urban Development (HUD), pays a portion of the tenant’s rent directly to the landlord or property management company while the renter pays the remainder. This is used as compensation for accepting higher-risk tenants.
Section 8 Pros and Cons
One of the most significant and seemingly only disadvantages to Section 8 Housing is the application and approval process. There is quite a large amount of paperwork involved, and numerous inspections have to be done to ensure your property is up to standards. Accepting tenants may come with a higher risk as the PHA gives vouchers to individuals whose income falls below 30%.
However, one of the biggest pros is that you will always receive a portion of the rent—usually the larger chunk—on a set day of the month. Qualified tenants are also encouraged to pay the remaining amount on or before a specific date.
Another plus to having Section 8 Housing tenants is that they usually rent the same property for more extended amounts of time instead of looking for another HUD-approved location.
Aside from the application and qualifying process, the Section 8 Housing Program is not that much different from typical leasing agreements. You can still have screening and background checks and, if things go south, go through an eviction process if the lease agreement is broken.