Learning about Section 8 (Part I)

Special thanks to Wikipedia for the excellent description and history behind this program:

Federal housing assistance programs began during the Great Depression to address the country’s housing crisis. In the 1960s and 1970s, the federal government created subsidy programs to increase the production of low-income housing and to help low income families pay their rent. In 1961, the Section 23 Leased Housing Program amended the U.S. Housing Act of 1937. This subsidy program, the predecessor to Section 8, was not a pure housing allowance program. Housing authorities selected eligible families from their waiting list, placed them in housing from a master list of available private units, and determined the rent that tenants would have to pay. The housing authority would then sign a lease with the private landlord and pay the difference between the tenant’s rent and the market rate for the same size unit. In the agreement with the private landlord, housing authorities agreed to perform regular building maintenance and leasing functions for Section 23 tenants, and annually reviewed the tenant’s income for program eligibility and rent calculations.

In the 1970s, when studies showed that the major low income housing crisis was no longer substandard housing, but the high percentage of income spent on housing, Congress passed the Housing and Community Development Act of 1974, further amending the U.S. Housing Act of 1937 to create the Section 8 Program. In the Section 8 Program, tenants pay about 30 percent of their income for rent, while the rest of the rent is paid with federal money.

The Section 8 program initially had three subprograms — New Construction, Substantial Rehabilitation, and Existing Housing Certificate programs. The Moderate Rehabilitation Program was added in 1978, the Voucher Program in 1983, and the Project-based Certificate program in 1991. The numbers of units a local housing authority can subsidize under its Section 8 programs is determined by Congressional funding. Since its inception, some Section 8 programs have been phased out and new ones created, although Congress has always renewed subsidy for families participating in the program.

Currently, the two main Section 8 programs are tenant-based vouchers and project-based vouchers. In the tenant-based program, eligible families with a certificate or voucher find and lease a unit and pay a reasonable rent--a percentage of their income. The local housing authority pays the owner the remaining rent, capped by the Fair Market Rent (FMR). The housing authorities determine the reasonable rent and the FMR is determined by the United States Department of Housing and Urban Development (HUD).

One of the essential features of the tenant-based voucher is the idea of portability. Eligible families may in theory move anywhere in the United States (and Puerto Rico) where there is a public housing authority operating a Section 8 program; however, in practice, some jurisdictions are unable or unwilling to take transferred vouchers.

Public Housing Authorities can choose to project-base up to 25% of their vouchers, meaning that the vouchers are linked to a particular apartment, not an individual family. Eligible families pay 30% of their income while living in the apartment, but cannot take that voucher with them.

In many localities, the waitiing lists for Section 8 vouchers may be thousands of families long, and waits of 3 to 5 years to access vouchers are not unusual. Public Housing Authorities can elect to close the waiting lists if they get too long.

How does the Section 8 program work?

Who pays the security deposit?

If you want a security deposit, you must collect this from the tenant. The Section 8 program has no responsibility for damages, unpaid tenant rent, or other claims you might have against the tenant.

The maximum security deposit you may collect is one month's rent. You may not collect the last month's rent.

Does the Housing Authority screen Section 8 tenants?

The Housing Authority does not screen Section 8 tenants for you. You must do this yourself, just as you would for non-Section 8 tenants. You should ask for Social Security number, references, current and previous landlords, credit history, employment history, criminal record, etc. and check the information carefully.

There are many services available to help you screen tenants. These services can check to see if the prospective tenant has a criminal record, has been evicted, or has bad credit. When checking references, always contact the previous landlord as well as the current landlord, because the current landlord may want the tenants to move out.

The Housing Authority will tell you the number of people on the voucher, current and previous address, and current and previous landlord. Some Housing Authorities will also share any other information they have. However, the Housing Authority's main concern is checking that the applicant meets the income limits and other Section 8 eligibility requirements. Screening the tenant is the landlord's responsibility.

Do I sign a lease with the tenant?

You must sign a lease with the tenant for a minimum of one year. The lease should include:

• Names of the landlord and tenant
• Address of the rental unit
• Term of the lease and how it will be renewed
• Monthly rent amount
• Which utilities are paid by the tenant
• Which appliances must be provided by the tenant
• Tenancy Addendum

How much rent can I charge?

The rent you charge must be reasonable compared to other units of similar size in your community. The Section 8 office will compare your rent to their payment standards, which are based in part on the fair market rents in your city or town. The fair market rents are the average gross rents (rent plus utilities) being paid in your community for modest apartments of varying sizes.

If the gross rent (rent plus utilities) for your apartment is less than or equal to the payment standard, the tenants pay 30% of their monthly income for rent and Section 8 pays the rest. If the rent is higher, the tenants must make up the difference. However, they are not allowed to pay more than 40% of their income for rent when they first rent an apartment.

If you want to increase the rent when you renew the lease, you must get approval from Section 8. The rent must remain reasonable and within the family's ability to pay, or else Section 8 will not approve it.

How do I get paid?

Section 8 will send you a check for their portion of the rent each month. They will continue to do so as long as the tenant remains eligible for Section 8 and your apartment meets the Section 8 program standards.

You are responsible for collecting the tenant portion of the rent each month.

May I evict a Section 8 tenant?

You may evict a Section 8 tenant in the same way you would evict a non-Section 8 tenant. The same laws apply.