Home Loan Services

Posts Tagged ‘Section 8’

The term Housing Section 8 or Section 8 housing refers to housing vouchers provided to low-income individuals and families by the United States Department of Housing and Urban Development (HUD). Some people have the impression that Section 8 housing refers to only housing developments owned by the government. This is not true as section 8 housing is usually not government owned.

While HUD may maintain such housing, a person may use a Section 8 voucher as a real estate allowance at any real estate rental available that accepts these vouchers. So by far most section 8 housing is privately owned but the Federal government (HUD) pays 70% of the rent directly to the apartment owner.

The United States Federal Government has long given attention to critical housing needs. During the Great Depression of the 1930’s, the Federal Government began developing programs that would subsidize housing for the poorest citizens, and continued this program in the 1960’s as there was an acute shortage of affordable homes. As now persons were spending a large percentage of their income on housing. The Section 8 program of the U.S. Housing Act was created in 1937 wherein a tenant will pay 30% of their income for housing rent, and the rest would be paid by the government.

While it may seem like a good deal for both tenants and apartment owners (landlords) to accept Section 8 vouchers, many apartment owners do not. It may be due to the fact that the government will regularly inspect all premises that accept Section 8 vouchers. In addition, the government will not allow rental rates above what it deems the fair market value of the rental. Some owners do not want the rental rate to be dictated to them.

There are also many more troublesome legalities in evicting a Section 8 tenant compared to a normal tenant as the government will provide the Section 8 tenant with a lawyer free of charge. In the case of a Section 8 tenant landlords realize they must have a lot of detailed specific documentation to substantiate their complaints. It can take a very long time and many dollars in attorney’s fees to evict a Section 8 tenant.

In some areas, landlords have waiting tenants that are not enrolled in the Section 8 program so they feel that there is no need for them to accept such vouchers. The extra paperwork and government requirements involved makes it not worth their time when they usually have other tenants wanting to move in. They may also worry that those enrolled in this program may not maintain the property to a good standard.

On the pro side, landlords that are willing to accept the government vouchers will never have to worry about not getting the 70% of the rent. The government pays the 70% of the rent directly to the landlord each and every month. The landlord will still have to collect the tenants’ 30% part from the tenants themselves.

There is a limited amount of money available for the HUD program and the waiting list for tenants to get on the program is extremely long. If a tenant refuses to pay his share of the rent or they are damaging the owners property in any way, the owner can report them to the HUD authorities. If the HUD authorities find the landlord’s claim justified they can remove the tenant from the program for up to five years. Most tenants are not willing to put their HUD status in jeopardy and will comply with all of the owner’s rental requirements.

Even if a landlord does not accept the HUD vouchers they must abide by Fair Housing standards. This mean they are not allowed to refuse a tenant based on nationality, race, religion, marital status, sexual orientation, and similar circumstances.

Landlords who do accept HUD vouchers can be assured that there will always be a list of prospective tenants waiting for Section 8 housing. It’s not unusual for there to be many more persons with Section 8 vouchers than there is available housing. If you own rental property, you should consider weighing the pros and cons of accepting Section 8 vouchers for your property.

There is no doubt that if you quality for Section 8 vouchers you will want to apply for them. Having the government paying 70% of your housing expense is a fantastic deal. However, you should keep in mind that Section 8 payments may not last forever as the United States sinks ever deeper into debt and at some point will be forced to reconsider many entitlement programs.

Tweet This Post