What Do You Know About Section 8?
(Editor’s Note: AAOA received this question from our member S.C: “Can you please publish an article on the pros and cons of Section 8 housing? Do you have any existing material on this topic? I would very much like to hear what other landlords think about Section 8.”)
Do you have any experiences with Section 8 to share with other landlords? Do you avoid Section 8 housing? Please comment below.
What is Section 8?
Section 8 is an affordable housing program run by HUD. This program is administered locally. It is a voluntary program.
Individuals who cannot afford a place to live apply to HUD for assistance. Applicants who are accepted for Section 8 are provided a housing subsidy – a voucher they can take to any landlord who agrees to participate in the program.
If a landlord wishes to participate, they must work with the local HUD office to assure that the property meets HUD standards for safety. The office may also review the lease agreement and determine if the rental amount is fair for the market.
Once a Section 8 tenant moves in, there are continued requirements with the housing authority, including inspections. Evictions of Section 8 tenants are also regulated by HUD.
What Are the Pros and Cons of Section 8?
Many landlords agree that the most important reason to accept Section 8 tenants in the guaranteed payments from HUD for as long as the tenant remains on the property. It is also a good way to find qualified tenants in a bad market. See our previous feature, A Smart Strategy for Filling Vacancies.
But the downsides include the added amount of regulation and paperwork.
Deciding whether to participate in Section 8 is largely market driven. In a time of low vacancies, Section 8 may not make as much sense for a landlord who can command higher rents. But today, vacancies are high, there are quite a few more rentals on the market, and unemployment continues to climb. Given those factors, Section 8 tenants may be the most reliable.
It is important to keep in mind that HUD only screens applicants for its own eligibility standards. If you accept a Section 8 applicant, you still must conduct your own independent tenant background check.
What’s your experience with Section 8 housing? Please post your comment below.
If you are interested in finding out more about the Section 8 voucher program, see HUD’s website.
For questions about our blog, contact our editor at [email protected].
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