Answering Common Questions About Housing Vouchers
Housing vouchers and the Section 8 program are one of the most poorly understood rental options for both parties in a rental agreement. As a landlord, you may or may not have accepted housing voucher tenants before, and it’s likely that you have questions or concerns about it.
In this article, we aim to answer ten of the most frequently asked questions about housing vouchers for landlords who may be interested in renting to voucher families in the future.
FAQ #1. What is a housing voucher?
A housing voucher is a government rental subsidy granted to certain low-income families, the elderly, and people with disabilities. They are part of the Section 8 program, also known as the Housing Choice Voucher (HCV) Program.
The Section 8 program is headed by the U.S. Department of Housing and Urban Development, commonly referred to as the HUD. The HUD oversees the program broadly, but individual public housing agencies (PHAs) located across the country manage it locally by distributing the vouchers. Section 8 vouchers are assigned to families, not properties, so a voucher-holder can use their voucher at any private rental housing whose landlord accepts it.
FAQ #2. Who can use a housing voucher?
Not everyone is eligible for a housing voucher. To qualify for the Section 8 program, a person or family needs to meet certain criteria set by the HUD and local PHAs, such as a good rental history, no prior evictions, and a certain income level.
Each region has different subsidized housing income limits that determine where a tenants’ or family’s income must fall to qualify. These income limits are typically based on the area’s median income. Families who make less than 30% of the median income get priority to vouchers, but those who make less than 50% can also qualify. In special circumstances, families who make less than 80% of the median income can also receive a voucher.
Even if a tenant meets all the criteria for the program and is accepted to the program, they aren’t guaranteed a voucher. Many PHAs get so many applicants for the program that there aren’t enough available vouchers. Accepted tenants are placed on a waitlist or Section 8 lottery until a voucher is available for them, some waiting months or even years. Waitlists in some cities are temporarily closed due to the exceedingly high volume of applicants.
FAQ #3. Do I have to accept tenants with Section 8 housing vouchers?
In short: Usually not, but maybe.
As a landlord, you have the final say regarding who lives in your properties. You should screen Section 8 tenants by the same criteria as you would any other tenant, including credit, criminal, and eviction checks (You can worry about income level less, as the local PHA will work with you to establish a fair market price based on your usual rates). If you find evidence that a Section 8 applicant is likely to damage your property, disturb other tenants, or default on their portion of rent, you are under no obligation to accept them.
However, in some states (such as New York, New Jersey, California, Oregon, Washington, Delaware, and others), local fair housing laws prohibit discrimination of renters based on ‘source of income.’ This includes vouchers, meaning that it is illegal to deny an otherwise qualified tenant from renting your properties based solely on their Section 8 status. In these states, if a Section 8 tenant applies to your property and meets all your typical requirements, you would have to accept them.
FAQ #4. How much of the rent do housing vouchers cover?
The exact amount of a voucher will vary, but most vouchers cover around 70% of rent. Sometimes this percentage can be adjusted if the tenant loses their job or needs to pay a different amount for another reason.
FAQ #5. How much rent can I charge a tenant with a housing voucher?
The total rent price for a Section 8 tenant may not exactly match the market rate you would typically get for the property. This is because rates are determined, in part, by the HUD’s fair market rate (FMR) for the rental, calculated at around the 40th percentile of the median income. Local PHAs use the FMR for your area as a baseline for negotiating the rent rate. They’ll also consider your asking rate for the unit, and both of you will come to an agreement regarding the rent price. In some cases, you may even get a higher rate for the unit with Section 8 than you would normally if the area’s FMR is higher than what you’ve been able to rent at.
FAQ #6. How do I know a Section 8 tenant will pay the rent their voucher doesn’t cover?
Tenants involved in the program only receive subsidy rental assistance if they remain eligible for the program. Being evicted will often disqualify them from receiving a voucher in the future, so many Section 8 tenants will pay reliably and on time to avoid this. Additionally, a voucher family’s portion of the rent (also known as the Total Tenant Payment, or TTP) shouldn’t exceed 30% of their monthly income, so the rent is reasonable and customized to an amount they can afford.
FAQ #7. Do housing vouchers cover security deposits?
No, housing vouchers do not cover security deposits or other amounts besides rent and utilities. You can still require Section 8 tenants to pay a security deposit, but they’ll have to do so out of their own pocket—which some inevitably won’t be able to. It’s up to you to decide whether you’ll require deposits from voucher families or how you’ll modify your policy to accommodate them.
FAQ #8. What do I get out of accepting a housing voucher?
There are several benefits of accepting vouchers for landlords. For one, vouchers represent guaranteed, reliable income for at least 70% of the rental amount. Considering that approximately 15% of all American renters were behind on their rent last year, having 70% of your rent assured can bring you much needed piece of mind. Section 8 rentals also get generous rent increases each year, which may outpace market inflation rates in the area. This could mean you generate more revenue through the Section 8 program than a neighboring landlord does renting at market rates, especially for medium- and lower-value properties.
FAQ #9. Can I still evict a Section 8 tenant?
Yes, landlords can still evict Section 8 tenants for not paying their rent, damaging the property, engaging in illegal activity, or any other typical reason. However, there may be a few extra steps you’ll need to remember before doing so: for instance, you’ll usually need to inform the PHA of your intent to evict the tenant and provide them some time to rectify the situation. However, if the tenant does nothing to correct the breach within the legal time limit, you can proceed with the eviction process as you would for any other tenant.
FAQ #10. How do I rent to a tenant with a housing voucher?
Before you can rent to a tenant with a housing voucher, you’ll need to apply to be a Section 8 landlord. This involves submitting a Request for Tenancy Approval Form with your local PHA. Once your application has been accepted, the PHA will reach out to you to schedule an inspection of the property. These inspections are known to be thorough, and cover everything from proper lighting and electricity to ventilation, pest control, infrastructure, HVAC systems, and more.
Once your property passes the inspection, you will negotiate rates with the PHA and eventually sign a Housing Assistance Payments Contract, or a HAP contract. This contract is an agreement between you and the PHA that you will maintain the unit’s habitability for the tenant, in exchange for which the PHA will send you monthly direct deposits for 70% of the rent.
Conclusion
Hopefully this article has helped clear up some of the confusion you may have had surrounding housing vouchers and the Section 8 program. If you’re interested in learning more, check out our other articles on the Section 8 program or reach out to your local PHA to learn about the program in your area.
