Section 8 (HCV): Do government funds ever run out? And other questions.

Section 8 (HCV): Do government funds ever run out? And other questions.

Member since 2024 · 1 post · 0 votes

Hi everybody! I have been listening to all the BP podcasts I can find on section 8 housing vouchers. They all talk about the pros of section 8 but not many get into the cons. I talked to a woman on the voucher waiting list recently about her experience with the process and she said most people that get approved for vouchers never move from that area, so the local PHA ends up closing their HCV programs because there aren't any more HCV qualified homes in that area. I'm wondering, is this not a major problem for landlords if no further applicants are getting approved for vouchers? Why haven't any of the BP podcasts mentioned this?

Another question that I haven't yet heard the answer to: Do local governments ever run out of HCV funds? Most of the podcast episodes I've listened to speak of these government funds as if they're unlimited. Is this true? If not, wouldn't that mean the local area would no longer have eligible voucher holders looking for qualified homes once they run out of funds? Again, seems like another major problem for landlords. 

Last questions, can't a voucher holder apply to any home of any size in their approved area? What would make them come to a landlord who wants to focus on voucher holders? As many of the BP podcasts have mentioned, it's not the house that gets qualified for section 8, it's the tenants. If I were a voucher holding tenant, I wouldn't limit myself to only looking for homes that say "Section 8 welcome" on their applications. I would apply to all of my dream homes and trust that the landlords can't refuse me because I would be protected under the Fair Housing Act. 

These are questions that have stayed in my mind through every episode I've listened to. Any help on these questions would be very appreciated. Thank you in advance!

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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
1y
Quote from @Spencer Manning:

Hi everybody! I have been listening to all the BP podcasts I can find on section 8 housing vouchers. They all talk about the pros of section 8 but not many get into the cons. I talked to a woman on the voucher waiting list recently about her experience with the process and she said most people that get approved for vouchers never move from that area, so the local PHA ends up closing their HCV programs because there aren't any more HCV qualified homes in that area. I'm wondering, is this not a major problem for landlords if no further applicants are getting approved for vouchers? Why haven't any of the BP podcasts mentioned this?

Another question that I haven't yet heard the answer to: Do local governments ever run out of HCV funds? Most of the podcast episodes I've listened to speak of these government funds as if they're unlimited. Is this true? If not, wouldn't that mean the local area would no longer have eligible voucher holders looking for qualified homes once they run out of funds? Again, seems like another major problem for landlords. 

Last questions, can't a voucher holder apply to any home of any size in their approved area? What would make them come to a landlord who wants to focus on voucher holders? As many of the BP podcasts have mentioned, it's not the house that gets qualified for section 8, it's the tenants. If I were a voucher holding tenant, I wouldn't limit myself to only looking for homes that say "Section 8 welcome" on their applications. I would apply to all of my dream homes and trust that the landlords can't refuse me because I would be protected under the Fair Housing Act. 

These are questions that have stayed in my mind through every episode I've listened to. Any help on these questions would be very appreciated. Thank you in advance!

 Yes, money is limited and appropriated by Congress. If funds for the program are reduced or eliminated it would create a national housing crisis, so generally it just gets carried at about the same level each year.

Yes, local governments run out of funds which is why they close their lists or the wait time is very long. 

States and some cities get broad latitude on administration of the program. Not every state or city mandates that any landlord has to accept Section 8, because the landlord has to not only subject their property to Section 8 inspections, rules and regulations, they also often have to separately arrange for the tenant to pay the non-covered part of the rent and can face difficulty evicting just based on that. I don't have to participate in the program in my state, and I don't participate. 

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  • Investor · Austin TX · Member since 2021 · 49 posts · 26 votes
    1y

    I've also been looking at section 8 and love the episodes with Dr. Joe Asamoah. I'm looking to invest in Detroit, and my understanding is that just because a voucher is worth a certain amount, the municipality may not have that amount to give out- as government funds are certainly not unlimited. What I'm most concerned about is the Project 2025 plan to gut HUD and most social services. No one knows what will happen, but you can read the plan straight from the horses mouth and it does not look good for the future of subsidized housing. I have a ton more to learn and am mostly just here to share your concerns, but after reading a lot of articles I'm shying away from expanding into this territory while he's in office.

  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    1y
    Quote from @Spencer Manning:

    Hi everybody! I have been listening to all the BP podcasts I can find on section 8 housing vouchers. They all talk about the pros of section 8 but not many get into the cons. I talked to a woman on the voucher waiting list recently about her experience with the process and she said most people that get approved for vouchers never move from that area, so the local PHA ends up closing their HCV programs because there aren't any more HCV qualified homes in that area. I'm wondering, is this not a major problem for landlords if no further applicants are getting approved for vouchers? Why haven't any of the BP podcasts mentioned this?

    Another question that I haven't yet heard the answer to: Do local governments ever run out of HCV funds? Most of the podcast episodes I've listened to speak of these government funds as if they're unlimited. Is this true? If not, wouldn't that mean the local area would no longer have eligible voucher holders looking for qualified homes once they run out of funds? Again, seems like another major problem for landlords. 

    Last questions, can't a voucher holder apply to any home of any size in their approved area? What would make them come to a landlord who wants to focus on voucher holders? As many of the BP podcasts have mentioned, it's not the house that gets qualified for section 8, it's the tenants. If I were a voucher holding tenant, I wouldn't limit myself to only looking for homes that say "Section 8 welcome" on their applications. I would apply to all of my dream homes and trust that the landlords can't refuse me because I would be protected under the Fair Housing Act. 

    These are questions that have stayed in my mind through every episode I've listened to. Any help on these questions would be very appreciated. Thank you in advance!

     Yes, money is limited and appropriated by Congress. If funds for the program are reduced or eliminated it would create a national housing crisis, so generally it just gets carried at about the same level each year.

    Yes, local governments run out of funds which is why they close their lists or the wait time is very long. 

    States and some cities get broad latitude on administration of the program. Not every state or city mandates that any landlord has to accept Section 8, because the landlord has to not only subject their property to Section 8 inspections, rules and regulations, they also often have to separately arrange for the tenant to pay the non-covered part of the rent and can face difficulty evicting just based on that. I don't have to participate in the program in my state, and I don't participate. 

    Skyline Properties
    View Page
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    1y

    @Spencer Manning

    Your other questions were answered except for last one.

    S8 vouchers are for a specific number of bedrooms and rent amounts.

    So, a S8 tenant must find a property with rent that does not exceed their voucher amount.

    This stops S8 tenants from renting Class A properties and most Class B.

    Currently, Fair Housing does NOT protect source of income, so unless a state or local government has passed a law stating otherwise, landlords do NOT have to accept S8 vouchers.

  • Tampa, FL · Member since 2023 · 17 posts · 9 votes
    1y

    . First, a lot of people with Section 8 vouchers end up staying in the same neighborhood because it’s where they feel comfortable, where their family is, or just because they know the area. This can be a problem for landlords because if no one is moving to new areas, it becomes harder to find new tenants for available properties. As for the funding, yes, the government can run out of money for new Section 8 vouchers. If this happens, new people won’t be able to get vouchers, and landlords may have fewer potential tenants to rent to. Lastly, while Section 8 tenants can technically apply to any home, it has to be approved for the program, and not every property is eligible. Many landlords also prefer to rent only to Section 8 tenants, so it can be harder for voucher holders to find the right house unless it’s specifically listed as "Section 8 welcome." So, while Section 8 can be a great program, there are a few challenges for both tenants and landlords to consider. Hope that clears things up a bit!

  • Member since 2023 · 111 posts · 70 votes
    1y
    Quote from @Spencer Manning:

    Hi everybody! I have been listening to all the BP podcasts I can find on section 8 housing vouchers. They all talk about the pros of section 8 but not many get into the cons. I talked to a woman on the voucher waiting list recently about her experience with the process and she said most people that get approved for vouchers never move from that area, so the local PHA ends up closing their HCV programs because there aren't any more HCV qualified homes in that area. I'm wondering, is this not a major problem for landlords if no further applicants are getting approved for vouchers? Why haven't any of the BP podcasts mentioned this?

    Another question that I haven't yet heard the answer to: Do local governments ever run out of HCV funds? Most of the podcast episodes I've listened to speak of these government funds as if they're unlimited. Is this true? If not, wouldn't that mean the local area would no longer have eligible voucher holders looking for qualified homes once they run out of funds? Again, seems like another major problem for landlords. 

    Last questions, can't a voucher holder apply to any home of any size in their approved area? What would make them come to a landlord who wants to focus on voucher holders? As many of the BP podcasts have mentioned, it's not the house that gets qualified for section 8, it's the tenants. If I were a voucher holding tenant, I wouldn't limit myself to only looking for homes that say "Section 8 welcome" on their applications. I would apply to all of my dream homes and trust that the landlords can't refuse me because I would be protected under the Fair Housing Act. 

    These are questions that have stayed in my mind through every episode I've listened to. Any help on these questions would be very appreciated. Thank you in advance!




    Hello!
    I've dealt with S8 housing my entire career as a Landlord and have a few answers for you. Now I always give the disclosure that I'm not an exact expert and can only give you my limited knowledge and experience.

    1st/2nd Question:
    I've never had a Housing Authority close up or lose financing. From my limited understanding of how they work is that S8 is a federal program that the local HA apply to so the funding is "Unlimited" as in that the local HA isn't individually funded. This setup allows for many different Housing Vouchers such as HOM INC, VASH, Regular S8, Rapid Rehousing, etc. etc. etc. The only way for a Local Authority to lose funding would be if the Federal S8 housing authority discontinued. And who cares if they did, the tenant moves out and you just rent to private pay tenants. Its not a big concern. Everyone needs a place to live.

    3rd Question:
    This is a thorny one. From my limited experience, the voucher programs I work with limit the bedroom count that any tenant can apply to so it will say right on the voucher 1, 2, 3, 4, or 5 bedroom. They can go up or down one, but have to get an exception. So you can't just rent "Anywhere" you want. Now for the application question, the vouchers are only valid for up to 60 days which means a tenant can't be looking at unfriendly properties. Why? Because unfriendly properties still do a FULL-BLOWN Application on the tenant and can deny for any normal reason they deny any tenant. Financial, Criminal History, Former Landlords critique, etc. Also the Voucher doesn't cover the security deposit which in most cases, I have to put my S8 tenants on a security deposit payment plan for those to get them qualified to move-in on my applications. So if you only have 60 days or lose your voucher, limited funds for security deposits, and a world unfriendly to the program that can deny for ANY normal application reason.... well you flock to the landlord friendly properties.

    Hope this helps.

    L. Thomas
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