What is Section 8?
The Housing Choice Voucher Program (“Section 8”) is the largest and most successful federal government program that helps very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market.
How Does Section 8 Work?
People who meet income requirements can apply to the program to receive a voucher when they become available. If selected, a Section 8 participant can rent properties that are listed at, or around, the current market rent rate. Once an agreement is made between a Section 8 participant, landlord, and housing authority, the housing authority will send payments directly to landlord.
The payments cover some or all the section 8 participant’s rent. On average, each household will pay somewhere between 30% and 40% of its income on rent.
Approximately 2.3 million households receive federal rental assistance via the Section 8 program. Section 8 is federally funded by the U.S. Department of Housing and Urban Development (HUD). Although federally funded, the Section 8 program is administered locally by over 2,400 Public Housing Agencies (PHAs) across the country.
Is it Hard to Get a Section 8 Voucher?
Obtaining a Section 8 voucher is not easy. Because of funding limitations, not everyone who qualifies for a Section 8 voucher receives one. Due to overwhelming demand, many waiting lists for Section 8 assistance are closed and only open sporadically and for brief periods of time. This makes getting on a Section 8 waiting list challenging. If you manage to get on a Section 8 waiting list, long wait times are the norm and families often wait years to receive a voucher.
Further complicating the process, most PHAs also have different local priorities or methods of selecting applicants from their waiting list. Often this includes a local residency preference for those living or working within the PHAs jurisdiction. Some PHAs also administer special purpose vouchers that are designated for specific populations, like the Mainstream Section 8 voucher program which provides a Section 8 voucher to households with a disabled adult household member.
In short, there are many different conditions that can make applying for section 8 cumbersome and difficult. AffordableHousing.com is trying to make this easier by partnering with many of these Public Housing Agencies. Our platform and partnerships help streamline the process of finding and qualifying for affordable housing programs, like Section 8.
What are the benefits of renting to a section 8 tenant?
The Section 8 Program virtually guarantees that a property owner will receive their rent every month.
Here are the top 5 benefits of renting to a section 8 tenant
- Guaranteed Rent
- Rent stability
- Decreased turnover, section 8 tenants tend to stay in the same property longer
- Market rental rates
- The regular inspections help safeguard your investment and help reduce risk of loss
Additionally, the Section 8 voucher program provides an owner with ‘Rent Stability’. Rent Stability means a property owner will receive their full rent each month even if a voucher holder loses their job and can no longer pay their portion of the rent.
An example of Rent Stability occurred in 2020 during the COVID-19 Pandemic. During this crisis, if family with a Section 8 voucher lost their job the PHA was able to adjust the tenant's portion of the rent payment downward and increase the government paid share. In other words, the government paid portion of the rent is increased to compensate the owner for the tenant's lower income. Rent Stability with the section 8 program kept millions of families housed and owner’s rent current during the COVID-19 crisis.
How To Become a Section 8 Landlord?
- Contact your local PHA. Each authority has different preferences and requirements based on the area’s affordable-housing needs.
- List your property on AffordableHousing.com. Posting a listing on AffordableHousing.com is free (premium features are available). Section 8 renters will begin contacting you as most of them use this platform to find housing.
- Select a tenant. Initial paperwork involves the landlord negotiating and executing a lease agreement with the renter. Any standard written lease agreement will do.
- Complete the RFTA (“Request for Tenancy Approval”) form provided by your section 8 renter’s case manager. On the RFTA you’ll be providing the PHA the address of the unit, the utilities the tenant is to pay, and the monthly rent requested.
- Get property inspection for Section 8
- Sign a contract with the Housing Authority
How Much Rent Can I Charge for My Property in Section 8?
An owner cannot charge more than the going market rent.
Owners often want to know what Section 8 will pay them for their rental property. The rent that an owner can charge for their rental unit must be Reasonable. For a rent to be deemed Reasonable the owner may not charge more than what is charged for a comparable rental unit in the same location in the private, unassisted rental market.
Affordable Housing Rent Estimator
AffordableHousing.com’s free “Market Rent Estimator” tool will help owners determine approximately what a reasonable rental rate would be for any property. If you are an owner and are thinking about renting your property to a section 8 participant, you should start here.
To more accurately determine that your asking rent is reasonable, the PHA is required to perform a “Rent Reasonableness” determination on your property. The Market Rent Estimation tool is not a replacement for the rent reasonableness determination. The rent value determined during the rent reasonableness process takes many more factors into consideration and it is a more accurate and defendable estimation. Therefore, the rent value shown in the Market Rent Estimator may differ from the final rent determined by the PHA’s Rent Reasonableness determination