Section 8 housing is a federal program designed to provide rental assistance to low income families, including applicants with disabilities and the elderly. Landlords can choose to enroll their properties in the program and provide housing options for these tenants. Then, Section 8 provides financial assistance by paying a portion of the rent directly to the landlord.
Property owners can widely benefit from participating in Section 8. Doing so could mean consistency in rental payments, lower vacancy rates, free advertising and improved overall profit. However, there are several requirements that must be met beforehand, including a property inspection. Nevertheless, proprietors can ensure their approval by learning more about their obligations as a Section 8-funded landlord.
How does Section 8 work for landlords?
Landlords seeking to participate in Section 8 should be aware of the program’s two main branches. In general, the Housing Choice Voucher program provides tenant-based benefits, allowing applicants to rent in the area of their choosing.
On the other hand, project-based vouchers are attached to the property itself, and will benefit only those who are currently residing at these approved locations. Both branches are run by the U.S. Department of Housing and Urban Development (HUD), and are administered at the local level by the Public Housing Authorities (PHAs).
How to Get Started With Section 8
Despite common misconceptions, getting started under the Section 8 program is a fairly simple process. It is important to note that both properties and landlords must first be approved by the local PHA.
Every state will have separate requirements to meet. However, there are some obligations that remain the same across the board.
To participate in Section 8 housing, landlords will need to provide The Request for Approval Form, along with other relevant personal information. The application will request the following:
- Property address
- Expected date to begin the lease
- Cost of rent
- Utilities included
During the application process, the PHA will ensure that rental rates fall within a reasonable amount, relative to other comparable housing options in the area. Because Section 8 assists low-income families, rental rates must comply with the fair market value to be approved under the program.
The Housing Quality Inspection is the second step within the application process. These inspections are often lengthy and are meant to ensure that all buildings and units meet the minimum housing standards set by HUD and the PHA.
Properties are required to have sound structure, proper wiring, functional plumbing and locks on all windows and doors. Depending on local codes and area regulations, landlords may need to include other additions to their property, such as central heating or cooling systems, ramps and handrails.
Properties that fail to meet these requirements will be given an allotted timeframe to make adjustments, and must then be re-inspected. Property owners also need to maintain rentals and be prepared for yearly inspections once approved.
After approval, landlords can begin accepting Section 8 vouchers. It is up to the landlord to find tenants, update any personal advertising and create a lease agreement.
Once a tenant has moved in, property owners can expect to have a portion of the rent sent to them each month through the PHA. Proprietors are responsible for collecting the remaining portion of the rent and the security deposit directly from their tenants.
Benefits and Disadvantages
Participating in Section 8 housing can be highly beneficial. It is best suited for large property managers who can easily handle additional requirements.
However, private landlords may benefit from Section 8 housing as well. It is important to understand what is required, as well as the advantages and disadvantages, before determining if Section 8 housing is the ideal fit for you.
With Section 8 housing rentals, monthly payments are secured. This is perhaps the most attractive advantage for participating within the program.
Landlords will receive a portion of the rent from Section 8 each month, either by mail or direct deposit. Similarly, tenants must pay for their share in order to remain within the program.
Additionally, financial troubles won’t affect rent under Section 8. The government continues to assist newly unemployed individuals or those with a reduction in wages.
In these cases, Section 8 will either pay the remaining portion of the rent or readjust the tenant’s contribution. This ensures landlords a consistent profit that is otherwise never guaranteed with traditional tenants.
The housing authority runs its own pre-screening process before approving vouchers. Individuals are typically screened for income levels and criminal background history.
Depending on the location, some PHAs will require drug testing from all adults within the household. This additional screening can give property owners some peace of mind.
Proprietors know that ensuring their rental is important. Tenants who pass both their landlord’s and housing authority’s screening process are less likely to cause any issues down the line.
Lower Vacancy Rates
Section 8 is a popular government program. A single housing authority likely has hundreds, and even thousands of applicants on a waiting list.
Because Section 8 housing is in high demand, participating landlords are exposed to a wide selection of potential renters. Additionally, Section 8 offers free advertising for approved rental units.
Listings appear on the HUD’s and the local PHA’s website, which helps to attract the attention of a wider audience. This can reduce overall vacancy rates, getting properties rented fast.
Rentals under Section 8 are required to have a routine yearly inspection. During these inspections, there are 13 major categories the local PHA will look at.
Failing inspection will require changes within a designated time period. Only then can the rental be re-inspected.
For this reason, landlords must regularly maintain their units. Failure to do so could lead to last minute stress and undesirable encounters with the local housing authority.
Section 8 requires all rentals to be priced at the fair market value. As such, rent must be comparable to similar properties in the area.
This regulation can deter many individuals. For example, landlords with well-kept and modern units in low economic areas may lose out on potential profit.
Similarly, landlords in high-rent areas may find it hard to lease at market value. For this reason, Section 8 housing may not be suitable for everyone.