Removing a Unit from Section 8 Voucher Program

[Jeffrey Gordon]

We are looking at a attached Row House that is SF rental by current owner and in Section 8 Voucher program.

From reading a few articles here on BP it seems that Local Housing Authority probably supersede Federal Regs--i.e. different areas probably have different rules.

The property needs a significant renovation to bring it up to the local market. This is in DC and property will sell now in the $300k range and needs $140k+ or - to create $550k market value.

We are debating flipping the property after the renovation, moving into it, or renting it out for $3,500/mo. We have lots of knowledge, experience confidence in this neighborhood.

Property is currently held in a family trust and the trustee has began looking into selling the unit after taking title about 3 years ago. She called us because of our activity in the local area to see if we might be interested in the property--she had hoped to renovate it herself, but now is interested in selling.

Our very initial research seemed to indicate that in DC a landlord has to wait a year to remove a unit from the Section 8 Voucher program. However, there is provision under the "rent control" regs. (which applies to most units but not sure about section 8 yet). for a unit to be removed from rental, renovated, demolished or occupied by the landlord in much shorter time periods depending upon the actual action.

Our gut instinct is to put the tenant relocation upon the seller as part of a purchase and sale agreement in a manner that is allowed under both Federal and local regulations and incorporate that time period into our development activities--i.e. budget and development planning and preliminary approval of financing by our portfolio lender--we would probably hold off on architectural and permit work until seller and tenant have come to an agreement for tenants re-location and hopefully close on the property after the tenant has actually vacated the unit. Then we could start preliminary work on the unit while awaiting the 60-90 days to obtain full renovation permits.

We would really appreciate any local DC info on removing a unit from the Section 8 Voucher program and/or if there is a national rule that it takes 12 months to remove a section 8 unit from the program in every situation?

thanks

jeffrey

[Chris Mills]

Hi Jeffrey,
The seller should have made the TOPA offer by now. Make sure that happened, the time line is important and it can kill the deal if you're requiring vacant delivery.
I would definitely budget for at least 6 months up to a year to remove the tenant if it falls to you. You're correct that the entire system is slanted towards the tenants favor.
With DCHA termination does have to be after the initial lease term. DCHA won't pay for relocation. It's in the seller's best interest to help with that as much as possible if it's a term of the contract. I've gone so far as to find the new place and pay for movers to make a deal happen.
Whether you move in or rent is up to you. Examine the rent you would get from your old place versus the new one after renovations.

Best of luck!