Section 8 housing in Ft. Worth

[Matt Buchalski]

Hi everyone,

I am a fairly new member of BP. Im closing on my first SFR next week and I am looking to grab a couple more in the next 90 days. Does anyone on this board have experience with accepting S8 on their properties in Ft. Worth or White Settlement? I am interested in figuring out exactly what criteria the home needs to fit to maximize the voucher, as well as to get a litmus test on how accurate the voucher estimates from DHA are. Lastly, does anyone know of solid property managers in this area?

Thank you,
Matt 

[Kyle Mccaw]

Section 8 claims they will pay market rate rent. However we rarely see them approve more than $1,200. Be sure the applicant has a voucher in hand and the number of bedrooms approved match the number of bedrooms in your property. Never believe what a tenant tells you about the $ value. Go off the paperwork only. I'm sure you already found a great manager by now, but feel free to reach out to me with additional questions. BTW we manage many section 8 properties throughout DFW.

[Patti Robertson]

I do a lot of SEC8 and find that the most important influence in getting strong rents is tenant selection - surprise! You need a tenant with income. If they are between jobs at the time they apply, don't accept them. (If your state allow that. Most still do.)  If there is only one wage earner, I want to see at least 30 hours/week. If there are two wage earners, I find that if they both work at least 20 hours/week we can generally max out the rent. 

[Neil Aggarwal]

Originally posted by @Patti Robertson:

You need a tenant with income 

 Maybe I am wrong, but isn't the rent for Section 8 housing paid by the government? So, why would it matter if the tenant is employed? Or, are you talking about collecting a higher rent than what the government is willing to pay?

[Patti Robertson]

@Neil Aggarwal - I'm glad you asked because your mistaken understanding would greatly influence your assumptions about the program. SEC8 is intended to be a housing supplement, not a housing payment. Voucher holders are required to work unless they are disabled. I have 100 of these tenants. A few are elderly and disabled, but the large majority are single parents (or even grandparents) raising kids on one low wage income. Literally, even working full time as a shift leader at Walmart or as a healthcare aid, they don't have enough income to house, heat, feed, and cloth their families. In order to be in the program they have to work, and no one in the family over 18 can have any felonies or drug convictions. The way the SEC8 budget works is SEC8 guesstimates how much your utilities will be and adds that into whatever they decided was your approved market rent. The tenant can only pay 30% of their income on housing - rent plus utilities. SEC8 then may have to adjust your approved rent down if the tenant does not have enough income. One time I had a voucher holder who paid 100% of the rent and SEC8 paid zero. It was a married couple who were both working. As long as they stayed under the annual income threshold and met all the other requirements they are allowed to stay in the program. Thankfully for me they did. This husband had an affair, the wife kicked him out, and that SEC8 safety net kicked in and started supplementing her rent. Landlord's are the biggest winners in these scenarios. Drama in tenant's lives is inevitable, whether it is lost jobs, divorce, dying parents that must be cared for, etc. People have crap happen that affects their income. The impact of these events on low income folks is devastating, which is why low income housing has such high turnover and collection headaches. SEC8 lifts that burdens from both the tenant and the landlord. 

So, yes, at the time of application, you want the tenant to be working. I want the hard working folks the program is intended to help, not the few who figure out ways to get around the requirements to sit at home collecting the government check. I find that if there is only one wage earner - no matter what the wage is - 30 hours seems to be enough to get the rents I want. If there are two wage earners 20 is OK. There is no exact science to this though. Every house is different. Every county is different. In every case though, more income means you are more likely to get your requested rent approved.

[Patti Robertson]

I forgot to add - SEC8 will determine the amount of rent the tenant can pay. Every time their income changes they must report it, and SEC8 reevaluates the ratio. This doesn't really affect you too much. SEC8 will mail you a letter. We just post the SEC8 payment on the 1st and collect the rest from the tenant. The tenant can only pay the portion directed by SEC8. You cannot charge another amount outside the contract. Doing so would be a violation of your contract with HUD, which would be a criminal act.

[Neil Aggarwal]

Originally posted by @Patti Robertson:

I'm glad you asked because your mistaken understanding would greatly influence your assumptions about the program.

 Thank you for the clarification. I did not realize it was just a supplement.