Section 8 is a federally created and supported program that is operated by individual state Public Housing Agencies (PHA), sometimes known as a “Housing Authority.” Once a prospective tenant applies, if they are qualified, they will be placed on a list for a voucher. It may take years to obtain a voucher. A tenant can apply to several housing authorities simultaneously.
- Section 8 tenants qualify based on family size and composition, income and assets.
Example #1: Single mother with 3 kids – 1 girl age 5, 1 girl age 7, 1 boy age 13. They would qualify for a 3 bedroom voucher. The mother gets her own room, the daughters get one room and the boy gets his own room.
Example #2: Single mother with 3 kids – 1 girl age 15, 1 girl age 7, 1 boy age 13. They would qualify for a 4 bedroom voucher. The mother gets her own room, the older daughter gets her one room (5 yr age difference), the younger daughter gets her own room and the boy gets his own room.
- These qualified tenants usually wait on a 3-10 year waiting list – until their number is called.
- When their number is called, they need to find a suitable rental to live in, preferably your rental listing; they receive a voucher usually covering 70% of their rent. This voucher is portable; they can transfer their benefits anywhere in USA after 12 months in program. The 30% co-pay is their 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.
- The amount of rent that the federal government will pay under the federal housing Choice voucher program (Section 8) is predetermined per geographic area on a annual basis. The government has established FMR (Fair Market Rent) values for each county in the country. These FMR values, broken down by bedroom size, reflect the maximum amount of rent payable to landlords that participate in section 8 program. These values are calculated assuming landlord will pay all utilities for rentable unit. If utilities are not included in rental price, the estimated cost of each non-included utility is deducted from the maximum allowable rental price (depending on average costs of utilities in a given area). You can access FMR county by county anywhere in USA: HUD FMR
A portion of their electric and water bills are usually subsidized through Sec8 grants and oil and gas is usually free through energy assistance programs such as HEAP. They usually get free health insurance through state run programs such as Healthy NY and free food via programs such as WIC and food stamps.
When they find a suitable unit Section 8 tenants are responsible for security deposits, broker fees and moving expenses. Some pay these fees in cash, others qualify for state run programs that pay these fees such as NY’s “One-Shot Deal” from Department of Social Services (DSS). There are also various non profits, churches and charitable organizations such as catholic charities and family service league that pay these fees on behalf of tenants (using grants earmarked in federal or state budgets). Most state also have special grants that cover the moving expenses of qualified Section 8 recipients.
If a Section 8 tenant you are renting to qualifies for NY’s “one shot deal” you as landlord will have to sign the Sec8 housing choice voucher forms plus the DSS “Green Housing Packet” You will also need to supply your Social Security # or Fed Tax ID # (for rentals held in corporate name), deed, property tax bill and rental permit. Most landlords receive 1 month cash security (a check) and 1 month non-cash security (a voucher). Total of 2 months security – enforceable through a landlord claim form (must notify DSS within 3 days of tenant vacating, must submit sworn landlord claim within 10 days after tenant vacates and must have inspection of unit to confirm damages). The system has built-in damage control leverage – if tenant causes a lot of damage they will be dropped from Section 8 program.
For you to receive Section 8 payments or security deposit monies, the property must be inspected by Section 8 and DSS or charitable organization and annually thereafter by Section 8 to qualify as an approved housing unit. If landlord does not have a rental permit, the property will be subject to a third inspection by the issuing building department. 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 Section 8 pre-rental inspection guidelines, so you can know the scope of work required to comply with federal housing choice voucher program.
If you’re an out of area owner, we can help you maximize your ROI and protect your assets by professionally managing your New York section 8 real estate holdings.
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 the Housing Standards cited below. The following information is provided as a general guide to an inspection. While this is not a complete list, it does cover the most common conditions that cause a unit to temporarily fail a pre-rental inspection.
- 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 the unit passes all inspections the caseworker will prepare the Section 8 lease and send it to you for signing, or you can prepare your own lease and submit it to Section 8 for review. When a fully executed lease, signed by both landlord and tenant is received caseworker will sign off on paperwork and authorize disbursement of funds and tenant can exchange balanced owed of broker fee and security deposit for key to rental unit. If tenant is paying your security deposit via government or charitable contribution, you must receive an Award Letter from caseworker authorizing payment.
The lease given to you will be for 1 year. After the year is up the lease reverts to a month-to month lease, with 30-day written notice from either you or tenant to break lease (unless you insist on new 1 year lease). As a landlord 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.
Evictions – You get paid during evictions. You get paid until the day a Section 8 tenant vacates unit. Section 8 tenants that are the subject of an eviction usually wind up being terminated from the highly competitive Section 8 program and are replaced by more respectful recipients that moves up the list. The fear of losing Section 8 benefits via eviction is a good deterrent for tenants not to cause property damage to rental units or miss payment of their portion of rent.