Combing section 42 (LIHTC) with section 8 vouchers

[Erich Wolff]

I'm looking at a multi family property that is currently classified under section 42 rules and will be for at least another 20 years - rent is locked in at low income rates and this won't be changing anytime soon.  The property analysis that is being provided (I've done my own analysis as well) shows the financials at both the current rents and the potential "market rents".  The argument is that if a tenant who qualified for this housing under section 42 rules also had a section 8 voucher, they would still pay the low income cap that is currently being charged but that the actual paid rent would be higher as it would be subsidized with the voucher.  Voila, the rent income is higher. There are actually a few tenants with the section 8 voucher currently and the rent income from these units is indeed higher.  So it certainly seems valid.  

Seems great in principal - if I really could get the majority (or all) of the tenants to be section 8 voucher holders and get market rent I think it would be a very good investment.  It's not a bad deal as is, without any section 8 increase in rent income, but certainly could be a lot better. 

I'm wondering if anyone has any experience or knowledge about this sort of section 42/section 8 combination.

I'm also trying to figure out how difficult it actually is to get these section 8 vouchers.  Is there a long waiting list?  It is harder to get these than it is to qualify for section 42 low income housing? Ideally one could assist the current tenants in getting these vouchers as I don't really want to be the guy to boot out all the current tenants in order to get only section 8 voucher holding tenants in place.  I'm not even sure if they could be removed with the section 42 rules anyway. If the process of having current tenants get section 8 vouchers is really challenging or would take a long time (or would they even bother?) I certainly want to know that ahead of time. 

Any advice or tips appreciated.