Section 8 is a federally funded program administered by HUD and run by individual state Public Housing Agencies (PHA), sometimes known as a “Housing Authority.”
The “tenant based” section 8 program, commonly known as the Housing Choice Voucher Program, pays a landlord with a privately owned residential unit some or all of a tenants’ rent.
To be eligible to receive Section 8 benefits a tenant must qualify based on family size & composition, income and assets. A tenant must have a clean criminal record and be a citizen of the United States of America or have eligible immigration status.
If a tenant applys and is qualified to receive section 8 benefits, they will be placed on a waiting list for a voucher. It may take 3-10 years to obtain a voucher. To increase the odds of obtaining a voucher, most tenants apply to several housing authorities simultaneously.
When a tenant is approved for section 8, they receive a voucher usually covering 70% of their rent. This voucher is portable; after 12 months in the program a tenant can transfer their benefits and port their family anywhere in the jurisdiction of the sec 8 program, this includes all 50 states, the District of Columbia, Puerto Rico, Guam, Virgin Islands and the Mariana Islands.
The 30% rental co-pay is a tenants’ responsibility. Tenants that contribute 30% or more towards their rental payment are known as “working Section 8″ tenants. If tenant does not pay their share, usually 30%, and provide proof they paid they can be dropped from section 8 program. If a section 8 tenant loses their job the 70% subsidy can increase to 100% and conversely if they get a higher paying job the 70% subsidy can be diminished and they will have to contribute more than 30%. This is a concept known as “Hustling Backwards”
For a landlord to receive Section 8 payments, the property must be initially inspected by Section 8 and annually thereafter to qualify as an approved Section 8 housing unit. The property must be legally zoned and cannot be in foreclosure or for sale to qualify as Section 8 approved housing. As a landlord you should be familiar with the Section 8 pre-rental inspection guidelines, so you can know the scope of work required for you to comply with the federal housing choice voucher program.
Section 8 Pre-Rental Inspection Guidelines
In order to be eligible to receive guaranteed monthly rental payments through Section 8, a landlords’ property must qualify, by passing an inspection that is in conformance with HUD’s Housing Quality Standards (HQS) cited below. To pass Sec 8 inspection a landlord should follow these guudelines:
- The landlord or a representative of the landlord should be present for the inspection.
- The Previous tenant and their belongings must be moved out.
- Unit must be clean and ready to be occupied by a new tenant.
- All utilities must be on.
- Plumbing, heating and electrical systems must be in safe working order. A leak under the sink or an exposed electrical outlet would result in a temporary rejection.
- There must be a clean, working stove.
- All living areas must have adequate light and ventilation.
- Minimum size for a bedroom is 70 sq ft., 1 wall must be at least 7 ft. The minimum ceiling height is 7 ½ feet for all living areas.
- Overall living space – 150 square feet for the first person, 100 square feet for each additional person.
- Window size – minimum of 8% of floor area- bottom of opening should be no higher than 3½ feet above floor.
- All windows must fit properly and be in working order. They must have unbroken glass panes and screens; locks and be operable.
- The bathroom must have either a window that can be opened or a properly installed exhaust fan vented to the outside.
- The floors in the kitchen and bath must be of a material easily washable and waterproof. Carpet in the bathroom is unacceptable. In the kitchen no carpet is allowed within 3 feet of the kitchen work space.
- The kitchen must have clean, washable food preparation area and storage space of adequate size for family.
- Every room must have 2 means of egress (doors and windows).
- Unregistered motor vehicles, boats, campers, etc., may not be stored on property. Garbage and debris must be removed from the property.
- There must be a smoke detector in each hallway (or area leading to bedrooms) on every level, and each bedroom.
- One carbon monoxide detector in each hallway (or area leading to bedrooms) on every floor.
- The front door and any other entry doors must fit properly and lock securely and have a screen door.
- Bedrooms and bathrooms should have privacy locks.
- The exterior of the dwelling should be in good condition. Peeling paint is not acceptable.
- Missing sections of siding, open cesspools, unstable porches or accessory buildings, or any condition creating a health and safety hazard must be remedied.
- Stairs exceeding 3 steps require a handrail.
- All rooms must have a minimum of 2 electrical outlets, or 1 outlet and 1 overhead fixture.
- One hour fire rated sheet rock (5/8″ width minimum) installed over oil and gas fired burners and hot water heaters, located in a cellar, basement or crawlspace, 3 feet from center of each unit in each direction as allowed.
- Self closing fire rated doors At boiler rooms on a habitable level.
- Oil and gas burners installed on non-combustible surfaces.
Once rental passes Sec 8 inspection the caseworker will prepare the HAP lease and send it to landlord for signing, or landlord can prepare their own lease and submit it to Section 8 for review and approval.
The lease given to landlord will be for 1 year. After the year is up the lease reverts to a month-to month lease, with 30-60 day written notice from either tenant or landlord to break lease (unless landlord insists on new 1 year lease). As a landlord, you should know that you can request a cost of living rent increase every year at anniversary of lease end, by submitting appropriate paperwork to Section 8 caseworker assigned to their tenant.
When a fully executed lease, signed by tenant and landlord is received by caseworker the PHA will sign off on paperwork and authorize disbursement of funds and tenant,landlord and broker can exchange fees owed (balance of broker fee -if required and security deposit) for keys to rental unit. If tenant is in a state where the landlord traditionally pays the broker fee, their only responsibility will be security deposit and moving expenses.
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