Section 8 Landlords with experience

[Mauricio Quintana]

Landlords of section 8,

Do you have any tenants who pay you the difference between the local housing authority's voucher limit and your market rent?  If so, any pros/cons you can share?  Does your local housing authority allow this type of arrangement?  If so, do they technically sign 2 different leases?

I've gotten some conflicting information and i've had zero luck reaching the housing authority.  Would appreciate the feedback from those who have the experience.

Thanks in advance,

[Matt Leber]

@Mauricio Quintana from what I understand, you can charge what you deem to be market rent regardless of the payment standard set up by section 8. As long as your applicant is approved through your housing authority to pay what you advertised your unit for and as long as you don’t broker a side deal after the HAP contract is signed for additional rent you are OK to proceed.

For example, for my zip code in Melbourne FL, the 4 bedroom payment standard on the section 8 website is $1467. If I advertise my unit on the open market for $1500 per month and a section 8 tenant is interested and gives me their packet and I fill out the packet stating the rent I am charging is $1500, there is no surprise side deal because all parties are aware of the rent I am charging. The housing office will then either approve the rent amount or tell me I have to lower it based on the tenant. Just because my listing is above the payment standard, does not necessarily mean they will force me to lower my rent. My sec 8 inspector told me he has “wiggle room” to approve above the published payment standard if he decides the unit and neighborhood meets the price I am asking. So, maybe $1500 is OK.

Then, when inspector has approved your rent amount and inspected your unit to make sure it meets or exceeds minimum housing standards, they will tell you what portion of the $1500 the housing authority is going to pay and what portion the tenant will pay. This is based on the Tenant’s income and family composition. In most cases they do not want the tenant paying greater than 30% of their income for rent and utilities.

So, in our example the rent is $1500. Say the local utilities average is $200 per month. That means there is $1700 in total living expenses. If the tenant makes $1.66k per month (20k per year), then 30% of their monthly income is $500. So, the housing authority will pay me $1200, the tenant will pay a total of $500 ($300 of which goes to fulfill the monthly rent and $200 to pay utilities).

This is how I understand the process in my area. Not sure if there are intricacies or differences from area to area.