Before you begin the journey of becoming a Section 8 landlord, you must learn the basics of what Section 8 housing is. Section 8, also known as the Housing Choice Voucher Program is a federal program administered locally by Public Housing Agencies (PHAs). It was initially part of the Housing Act of 1937 and allows landlords to be paid for rental units by local housing authorities on behalf of low-income, elderly, or disabled tenants who otherwise don’t have the means to rent a safe, sanitary home.

The Department of Housing and Urban Development (HUD) provides funds to local housing agencies in the form of vouchers for tenants who qualify for the Section 8 program. These housing choice vouchers allow low-income families to rent private housing by supplying housing assistance payments directly to the landlord.

Because the program is run locally, Section 8 rules and regulations for landlords (as well as the procedures for tenants) may look different depending on your area. In many cities, a tenant must make less than 50% of the local median income to qualify, and residents who make less than 30% are given priority. Tenants must also meet certain other criteria, such as having an eligible immigration status, before being set up with a housing assistance payment.

So, why become a Section 8 landlord in the first place? How does Section 8 benefit you as a landlord?

Section 8 housing is worthwhile for many landlords because while the Section 8 tenants only pay about 30% of the rent, the remaining 70% is sent to you directly by the PHA — so you can still receive rent for your property at market rates. In many cases, Section 8 landlords actually have more consistent income since the government has a hand in ensuring 70% of your monthly rent arrives on time.

You’ll also likely have a near-constant tenant base since there are often low vacancy rates for Section 8 housing. Waitlists are quite long in many cities, and some programs have so many tenants waiting for vouchers that waitlists are closed indefinitely. When tenants are placed with a voucher, they typically stay in their rental units for extended periods of time, meaning your income is reliable and your tenants have stability.

Above all else, by offering Section 8 housing, you’re helping those in need acquire housing, and that’s a benefit in itself.

How does Section 8 work for landlords? The process isn’t as intimidating as it may seem, though there are specific steps you must take to be approved as a Section 8 landlord. Let’s look at how to get started on being approved as a Section 8 landlord.

Firstly, you’ll want to find and research your local PHA so you can understand Section 8 rules and regulations for landlords, such as keeping the unit safe and up to code. Then, you’ll need to reach out to your PHA to fill out Section 8 paperwork that registers your property for Section 8 housing.

Once you’re registered, you should market your property to potential Section 8 tenants. The tenants you find through advertising should be screened using the same criteria you would use for any other tenant (not including income requirements). Though some landlords may misguidedly encourage it, you should never use harsher screening tactics on Section 8 tenants than you would with other tenants since it could be seen as housing discrimination against low-income renters.

Once you find a tenant you’d like to rent to, you should fill out a Request for Tenancy Approval (RFTA) form to be approved to rent to a particular voucher family. You can then work with your local PHA to schedule a housing inspection. Section 8 rental units must strictly meet HUD housing quality requirements, so if any issues are found, they must quickly be repaired so another inspection can be scheduled.

After your unit passes its inspection, you can negotiate the price of rent with your PHA. They use Fair Market Rents (FMRs) to determine Section 8 rent prices, so if yours is above the FMR, you may need to lower it. You’ll still have the opportunity to negotiate a price with the PHA before a tenant moves in.

Lastly, you must sign a Housing Assistance Payments contract (HAP contract) which states that the PHA will pay 70% of a tenant’s rent (the tenant will pay the other 30%) so long as you maintain the home.

That’s it! You’re approved and your tenant is ready to move in. Your only further responsibility is to schedule yearly property inspections with the PHA to ensure they’re up to HUD code. That way, tenants in your units are guaranteed a safe, habitable home for their families.

Section 8 housing is a valuable part of the real estate market that mutually benefits landlords and tenants. Whether you’re just beginning the approval process of becoming a Section 8 landlord or know nothing about the program, visualizing the process from start to finish is a good place to start. Download Innago’s Section 8 Approval Process flowchart above to get started.