How to "income qualify" a section 8 tenant?

Question

What ratio's do you LL's use to qualify a section 8 applicant?  I have a prospective tenant with a voucher for $1,575 (the rent amount) and an SSDI income of $908/yr.  This person also receives food stamps in an unknown amount.

It seems to me that they don't meet my income ratio's of about 35-40% (meaning that rent should not exceed 35-40% income).  If you count the voucher as income, you have 1575 plus 908.  About $2,480 in income.  Is there a special consideration for section 8?  They do not meet my criteria but I haven't had this issue before and don't want to run into any legal issues.  They are being extremely persistant about leasing the place.

Steve Babiak · Answer

You do not have to accept Section 8 AT ALL.  I have units where I would never allow a tenant with a voucher.

As for the other adult(s), you certainly want to be familiar with their background, because once they become an occupant in your place, then you just might have to evict all occupants.

Additionally, depending on your policies, the income of all occupants might be totalled to determine whether they have enough income. (Or you might take an average, or the lowest to determine qualification.)

Todd Brittingham · Answer

Cheryl,

You're absolutely doing the right checks here.  Just because they are section 8 doesn't mean they don't need addtional money for food, utilities, clothing, etc.  Utilities can be a big issue if you are in a colder climate and the gas gets turned off in the winter.  3x rent is a good start, and I would include the section 8 money as income to them.  Under this guideline they would not qualify...

Also, with our policies, anyone living in the house is a tenant and is put on the lease.  There are way more things to consider in the lease other than who is paying the rent.  If you live in the house, you need to abide by the lease, and therefore you must sign.

Bienes Raices · Answer

I guess you have resolved this by now, but if not it sounds like you are wasting a lot time dealing with these duds. From what I understand you can always reject based on an incomplete application--this should be the ace up your sleeve for someone you don't want to rent to. Don't waste time bugging him to complete it, just send the rejection form letter.

And I don't think you have to just accept his version of what "housing" says.

Cheryl C. · Answer

Steve, I can be a soft touch and I have felt sorry for tenants in the past.  I've let some go for up to 3 months; depending of their length of tenancy, reason for job loss, prior job history, etc.  It's worked out with little exception.  I'm amazed at how many people live paycheck to paycheck and have no family that can help them in a time of need (maybe too many times to the well).  It IS different to give keys to someone who looks marginal, or less, from the outset.

Michael R. · Answer

"Housing says that credit should not be considered"  Well fortunately for you you are the owner of the property and you make the rules and requirements. As far as I know you cant discriminate on Race, color, religion, sex, origin, age, disabilities, or if they have kids.  So if you require a credit check that is what you as the owner require and they are not protected against that. I would put in the email that they will not be considered until that COMPLETE an application along with and applicable fees and other requirements. If you were concerned about a lawsuit I would talk to a lawyer if it will put you at ease, but in my experience most these people talk about lawsuits but rarely follow though. I think your doing the right thing dont be intimidated into rented to someone your not comfortable with.

Cheryl C. · Answer

Ok. "Denied based on income".  I broke the cardinal rule: never feel sorry for a tenant.  Their voucher was about to expire and they are desperate.  Not my problem.

Thanks all for the advice.

Jonathan Sher · Answer

Cheryl, the son sounds like a "professional" tenant. I would be careful

Account Closed · Answer

cheryl, stick to your guns...i don't accept section 8 tenants either

Davion Malwah · Answer

If you have better alternatives go for them, if not the first slip up boot em on out.

Cheryl C. · Answer

Thanks Grace.  Yes, it's rented to a professional couple on a two yr lease.  They make over 90K.  How is your search going?  I am going to forward something to you later.  If you come across what may be a good flip that you aren't interested in, send it my way!

How to "income qualify" a section 8 tenant?

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