Section 8 Program
What is Section 8?
Section 8, or the Housing Choice Voucher Program, is a Federal housing program which provides housing assistance to low-income renters and homeowners. This assistance comes in the form of rental subsidies, limiting the monthly rent payment of the assistance recipient. The term “Section 8” is used because the federal law, which created the program, is Section 8 of the Housing and Community Development Act of 1974.
What does the Section 8 program do?
The Section 8 Housing Choice Voucher Program assists low-income individuals and families with their rental payments. Under the Section 8 Program, property owners retain the same rights and responsibilities that they have under the applicable state law where the house is located. Property owners use their own rental agreement or lease (through their property manager) and decide what the term of tenancy will be (typically one to three years). The tenant has the same obligations as any tenant under his or her applicable state law. The local Housing Authority’s subsidy does not change the normal relationship of property owners or managers to tenants. The main difference is that each month the property owner will receive two payments for the tenant’s rent – one from the tenant, which is about 30% of his or her income (on average), and the balance from the local housing authority.
Who does the Section 8 program assist?
Participant families include seniors, persons with disabilities, families with young children, and working families who do not earn enough to keep pace with rising rental housing costs.
How does the Section 8 Program work?
In the Section 8 Housing Choice Voucher Program, participants have a limited time (typically 60 to 120 days depending on the city) to find suitable housing offered by a private owner using a Voucher issued by the local Housing Authority (HA). Any housing selected must meet local codes and federal standards called Housing Quality Standards (HQS). Housing Choice Vouchers give a family flexibility to pay more than 30 percent of their income for rent and utilities if they desire. However, families who are new admissions or move to a new unit cannot pay more than 40 percent of their income when they move in. The subsidy is calculated by using the lower of the Voucher Payment Standard or the gross rent minus the total tenant payment. The Voucher Payment Standard is the maximum amount the local Housing Authority will pay (based on “rent reasonableness surveys”), and varies from city to city. All Voucher units must meet a rent reasonableness test (i.e. the rents cannot be higher than similar units in the area). This test is performed on each unit leased and when an owner requests a rent increase. In the Section 8 Program, families pay their share of the rent directly to the property owner or manager.
What is the step-by-step procedure for the Section 8 Program?
The step-by-step procedure is as follows:
1) The applicant applies for Section 8 when the waiting list is open.
2) The applicant’s name comes to the top of the waiting list.
3) The local Housing Authority (HA) determines if the applicant is eligible for the program.
4) The applicant is issued a Voucher and a Request For Assisted Tenancy (RFAT) form.
5) The voucher holder looks for housing within the area for 60 to 120 days.
6) The voucher holder finds a unit on the private market to rent.
7) The property owner/manager of the unit screens the applicant for suitability as tenant (The HA does not screen for tenant suitability.)
8) The property owner/manager and the voucher holder complete the RFAT form and return it to the HA.
9) The HA inspects the unit according to Housing Quality Standards.
10) The HA passes and approves the unit or notes needed repair items.
11) The HA negotiates rent based on Rent Reasonableness.
12) The HA enters into a contract with the property owner/manager of the unit.
13) The owner and tenant sign the property owner/manager’s Rental Agreement or Lease.
14) The HA receives a copy of rental agreement between the tenant and property owner/manager.
15) The HA inspects the unit annually.
16) The HA reviews tenant eligibility annually.
How is rental assistance provided?
The Housing Authority calculates the amount of assistance each family receives. The level of assistance is based upon family size and income. A family is expected to pay approximately 30% of their current adjusted income toward their rent. Each month the Housing Authority will make housing assistance payments directly to the landlord.
What are the tenant’s rent responsibilities?
The tenant must pay all rent and utilities that are not covered by the contract. Because the family is receiving assistance, the rent burden should be reduced, enabling the family to pay rent more easily and on time.
Who pays for the utilities?
The tenant is responsible for paying all utilities. Each local Housing Authority has average utility cost information that they use to calculate how much a tenant can afford to pay. In other words, the local Housing Authority will factor both the rental cost and the expected utilities cost in determining how much they will subsidize the tenant.
How much does the tenant pay, and how much does the Housing Authority pay?
The tenant pays an amount that is roughly equivalent to 30% of their monthly income. The local Housing Authority pays the balance of the total rent to the property owner. In some cases, the tenant may pay more than 30% of their income. In other limited cases, the local Housing Authority can choose, at its own discretion, to pay for the entire amount of a tenant’s rent.
How much may landlords charge for a security deposit?
Landlords are allowed to charge a security deposit of up to one month’s rent.
What if the owner wants to terminate the lease?
The owner may terminate the lease unilaterally only if the tenant violates the lease, or for other good cause. The owner and the tenant can decide to mutually terminate the lease at any time. A tenant can terminate his or her lease by submitting a written 30 day notice to the landlord and the local Housing Authority.
If a tenant receives a 2 bedroom Voucher, can the tenant choose to live in a 3 bedroom house?
Yes, although the tenant would be responsible for paying any amount above and beyond the 2 bedroom Voucher amount allocated by the local Housing Authority. In addition, the local Housing Authority will not approve any tenant who attempts to sign a lease (as a new admission into the Section 8 program or into different unit than where they previously resided) where he or she will be required to pay more than 40% of his or her income toward rent. This restriction is typically only placed on the tenant for the first year of a lease. If the tenant renews the lease, then the Housing Authority will allow the tenant to pay whatever he or she agrees to, with the caveat (to both the landlord and the tenant) that if the tenant fails to meet his or her financial obligations, he or she will be removed from the Section 8 program. In oversubscribed cities, this means that it could take several years before the tenant could reapply for Section 8 subsidization again. From our experience, one should try to avoid setting a rental rate that requires the tenant to pay more than 40% of his or her income, because it increases that tenant’s chance of failure (i.e. inability to meet the financial obligations of the lease).
Can a tenant choose a property with rent that is higher than the Fair Market Rent established by HUD (or rent reasonableness survey done by the local Housing Authority)?
Yes, although the tenant would be responsible for paying any amount in excess of the Fair Market Rent (or rent reasonableness). For example, if you are charging $900/mo and the Fair Market Rent (or rent reasonableness) for the area is $850, the tenant will be responsible for the extra $50/mo, in addition to their 30% of their adjusted income. This is subject to the 40% first year restriction limit (please refer to the previous questions for more information on this restriction).
How long does it take for a tenant to get a voucher?
It varies. In oversubscribed cities, the waiting lists can run several years. In fact, many Housing Authorities frequently close their waiting lists and stop accepting applications because their waiting lists are so long.