Section 8 is a Housing and Urban Development (HUD) assistance program for low-income families that provides housing payment assistance to families based on their ability to pay housing costs.
Section 8 programs are administered by a Public Housing Authority (PHA); either the State, the local city housing authority, or the county housing commission. The PHA pays most of the rent directly to the landlord each month. Assistance program contracts are administered in one-year terms. So to avoid mid-term moves for Section 8 tenants, my advice is to make your leases annual renewals rather than monthly. This will help lower your turnover rates and keep your properties full for longer.
In order to be approved and accept a Section 8 tenant, your rental property must meet HUD inspection guidelines which will verify that the property is in habitable condition and that all utilities are working properly. You should obtain a copy of these requirements from your local PHA and ensure that you are familiar with all areas included in the inspection. It makes a good impression if your property passes inspection the first time. However, don’t be discouraged if an issue arises that requires additional work before you get final approval. The agency will give you 30 days to correct any problems. Please note, however, that the PHA will not pay any day’s rent until the property “passes” inspection. Therefore, you must include that in your tenant’s move-in schedule, and it is STRONGLY recommended that you do not allow your tenant to move in until they have passed inspection and have a Housing Assistance Program (HAP) contract signed by the tenant. PHA.
- Screen tenants; they are responsible for the terms of the lease, not the Agency.
- Please review the inspection guidelines and familiarize yourself with all requirements.
- Get a security deposit for as much as your state allows. Many times this is one or one and a half times the amount of the monthly rent.
- Make your leases one-year long with one-year renewal extensions instead of month-to-month leases. Therefore, you will be less likely to have to deal with moving in the medium term.
NOT TO DO
- Do not let the tenant move in until they have signed a HAP contract.
- Don’t wait until the last minute to prepare your property for inspection.
- Do not assume that since you have a contract with HUD that they will pay for damages caused by the tenant. They will not!
- Do not include the tenant’s utilities in the rent amount, the PHA will not pay you dollar for dollar for the utilities and you will lose money.