Many landlords shy away from section 8 rentals because they are afraid the property will be trashed or that four generations of family and friends will move in. In the vast majority of situations, these problems never happen. In fact, the chances of problems are higher with the general public than with section 8 renters.
The section 8 rental program is a federal program run by the U.S. Department of Housing and Urban Development (HUD). However, it is administered at the local level by Public Housing Authorities. Section 8 housing is not public housing. Under section 8, families and individuals find private housing suitable to them in the private sector and the government subsidizes their rent. Typical participant are the elderly, disabled people, and working low-income families. These people are screened before they qualify for section 8.
Section 8 participants are first screened by the public housing authority and then by you as the landlord. Information screened by the public housing authority includes family income, assets, family members, employers, and banks. Participants must pay 30% of his or her monthly adjusted gross income for rent and utilities. The allowable rent subsidy is determined by the public housing authority. However, the participant can elect to pay a higher rent as long as it doesn’t exceed 40% of adjusted gross income.
While the public housing authority screens for program qualification, as a landlord it’s your responsibility to screen for good tenants. It’s the same screening you would do for any tenant. You want to ask for Social Security numbers, references, current and previous landlords, credit history, employment history, criminal record, etc. It’s your responsibility to check the information carefully.
Qualifying for Section 8
Eligibility for section 8 varies by location but generally the public housing authority performs a criminal back check and in many cases a credit check. Participants are disqualified for recent drug related offenses, alcohol abuse, and crimes.
Only families qualify for section 8 assistance but the definition of families is broad and can include individuals. The importance of this is that section 8 only allows approved family members to live in the residence. Moving in unauthorized members disqualifies the family. Additionally, section 8 status can be revoked if the family fails to comply with your lease requirements. Other disqualifications include unpaid rent under a previous section 8 contract, unpaid damages to a rental unit, and any other unpaid expenses involving a section 8 contract.
Waiting lists to section 8 housing are long, the qualifications stricter than most landlords impose, and once families qualify they don’t want to lose the benefit. This combination can offer landlords more security than randomly screening applicants from the general public.
Author bio: Brian Kline has been investing in real estate for more than 30 years and writing about real estate investing for seven years. He also draws upon 25 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest in the Olympic Mountains with the Pacific Ocean a couple of miles in the opposite direction.