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 expenses.
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 the landlord directly for most of the rent 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 with yearly renewals instead of converting them to month-to-month. This will help lower your churn rates and keep your properties full 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 livable 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. Make 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. However, please note that the PHA will not pay any days’ rent until the property “passes” inspection. Therefore, you should include that in your tenant’s move-in schedule, and it is STRONGLY recommended that you do not allow your tenant to move out until they have passed inspection and have a signed Housing Assistance Program (HAP) contract with the pha.
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- Screen the tenants; they are responsible for the terms of the lease, not the Agency.
- Review the inspection guidelines and familiarize yourself with all the 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 rental agreements one year long with one-year renewal extensions instead of turning them into month-to-month contracts. Therefore, you will be less likely to have to deal with removals in the medium term.
NOT TO DO
- Do not let the tenant move out 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 utilities and you will lose money.