Section 8 housing?

Question

Brandon McCombs · Answer

I have apartments in north central wv. I inherited section 8 tenants through the purchases of a 9 unit bldg. I've since gone through the process twice with new HUD tenants.

For me I told the local HUD office to put me on the landlord list. Since then we get calls a few times a week asking if we have something available. The people who call already have their voucher. We don't even need to specifically look for them or advertise. HUD essentially did that for us.

When they call we tell them what we have when they ask. If something is available we offer to show it to them. If they like the unit we have go through the same application process as a non-HUD tenant which involves a background check and other checks. We don't do income checks because HUD already does that.

If approved we fill out the landlord portion of the paperwork they get from HUD and then submit to the HUD office. In the meantime we sign a lease with the tenant. HUD will inspect the unit and use many of the same inspection checklist items as the local city inspector uses for issuing certificates of occupancy.

If it passes inspection the HUD caseworker will sign contracts with me and with the tenant in separate contracts. They give us paperwork that specifies how much HUD pays and how much tenant pays. HUD *will* actually allow a tenant to pay up to 40% of their income for rent. We have a tenant now who is doing that. She is on the edge of not qualifying for assistance because of her income, despite having 3 kids.

The tenant and us must have a lease signed prior to the HUD inspection. When the unit passes inspection and those other contracts are signed that's the date HUD uses to define the start of the lease and thus the rent they pro rate for the first month. We have one tenant who had been paying nothing because she is disabled. Her SSI disability kicked in and she now pays about 25% or so.

We have HUD direct deposit their portion of all tenant rent in our bank account. The rest we collect as cash from each tenant. We give them receipts because they ask for them. I believe it is to show proof they aren't paying more than HUD says they are allowed to, otherwise they are indeed in violation of HUD policy. We as landlords also can't demand they pay more than what HUD says they can.

However , we can charge pet fees and security deposits just like with non HUD tenants.

Despite the local HUD office servicing 8 counties around me the caseworkers are able to get paperwork and inspections turned around in 1-2 weeks.

Jeremy Pace · Answer

It may be different in your area, but I'll use my experience to explain.

Step #1: You find a tenant that has a section 8 voucher

Step #2: You and the tenant fill out a contract for section 8

Step #3: Sec 8 will inspect the unit, and will tell you what needs fixed to conform to Housing Quality Standards (HQS) They are nearly guaranteed to find SOMETHING you have to fix.

Step #4: Once repairs are made, tenant will be given a move in date, and section 8 will determine what the rent will be for the unit, and how much of that rent the tenant will pay based on the tenants income (they cannot pay more than 30% of their income in rent) the Fair Market Rent (FMR) and the utility worksheet (the FMR is reduced based on what utilities the tenant pays).

Step #5: Every month Section 8 will pay you their portion (unless there is some issues with the tenant or unit), and you'll have to chase the tenant for theirs.

In my experience, Section 8 will not spend the time to inspect a unit until you have a vouchered prospective tenant.  To draw these tenant to your listing, you can put something like 'Section 8 Vouchers welcome' in your rental advertisement.  Do not say 'Section 8 only' or 'Section 8 preferred' because it violates fair housing legislation.

Good luck!

Brandon McCombs · Answer

@Ariel O.

I've found that I can't get any tenant-specific information from HUD caseworkers until I am officially their landlord and I have to wait for the title to be sent to me after closing to provide that to HUD as proof of ownership and therefore the new landlord. So that trick won't work for me.

As for background checks, HUD could care less. HUD doesn't even get involved until I have approved the prospective tenant, at which point I fill out the prospective tenant's HUD paperwork and submit to HUD. HUD will then contact me to schedule an inspection of the rental unit. Prior that inspection all the lease paperwork between me and the tenant has to be completed. If we don't approve the tenant through our application process then HUD isn't even contacted because there is nothing for them to do yet. The applicant simply moves on to looking for another rental unit with a different landlord.

It's up to the landlords to have an application process, to perform background checks (or other checks), to charge for a security deposit and any pet fees. HUD doesn't get involved in any of that so the landlord still has control over all that, which is nice.

Ariel O. · Answer

@Brandon McCombs

One other 'trick' I've heard from Section 8 landlords is to get access to their case file/talk to the caseworker and make sure there is nothing bad that happened in the past.

Does HUD care if you do a background check? What happens if you deny based on your criteria?

Kevin Nalley · Answer

The only thing I would like to add... in my area,  the process of turning in their paperwork, waiting on the initial inspection, then attending to the initial inspections "fix it" list, then re-inspection, can tie up your property for 6 weeks before you actually start getting rent.   Just keep that in mind and factor it in your costs.

Jeremy Pace · Answer

I finally broke down, created a blog, and wrote out some Section 8 details.

http://www.biggerpockets.com/blogs/6591/blog_posts...

There should be some salient details that can point you in the right direction.

Section 8 housing?

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