Section 8 Housing: A Reasonable Choice

HUD administers the section 8 Program; it is the federal government's major program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. But the program is administered locally and not from the national level by public housing agencies (PHAs).

A housing subsidy is paid to the landlord directly by the PHA on behalf of the participating family. The family then pays the difference between the actual rent charged by the landlord and the amount subsidized by the program. Under certain circumstances, if authorized by the PHA, a family may use its voucher to purchase a modest home.

Eligibility

In general, the family's income may not exceed 50% of the median income for the county or metropolitan area in which the family chooses to live. By law, a PHA must provide 75 percent of its voucher to applicants whose incomes do not exceed 30 percent of the area median income.

Section 8 families must:

1. Meet Govt. income guidelines

2. Pass a criminal background check

3. Have at least one family member who is a U.S. Citizen or has eligible Immigration status

Their are pros and cons to using section 8 applicants to help fill your vacancies. The main thing to understand is to dispel the myth that section 8 eligible applicants are criminal or something to be afraid of. Following is a bullet list of some of the reasons why and the complications that come along with a Government subsidized program of any kind....You have a relationship with a bureaucracy as well as your tenant.

Advantages:

* Owners get rent security

* Yearly inspections of the unit

* Fair market rental rates

* Strict renter responsibilities defined in the lease addendum

* On-time payments

* Tenants can be removed from the program for damages to the unit or failure to pay rent.

* Waiting list of tenants provides landlord with a stream of eligible renters

Disadvantages:

* Two Contracts: Your standard lease and a Govt contract with HUD.

* Govt is another party to the tenant landlord relationship

* Rules may be different: California Civil Code statue provides in pertinent part as follows: Where an owner terminates or fails to renew a contract or recorded agreement with a governmental agency that provides for rent limitations to a qualified tenant, the tenant or tenants who were the beneficiaries of the contract or recorded agreement shall be given at least 90 days' written notice of the effective date of the termination and shall not be obligated to pay more than the tenant's portion of the rent.

* Annual Govt inspections of the unit by Govt inspectors to assure quality housing

* Fair Market Rent is the cap the Govt imposes on what it will pay for your rental unit - you may feel you can get more for the unit

Howard Bell for Your Property Path