In an unstable economy, any of us can find ourselves needing help. An unexpected job loss, illness, or injury could change someone's financial outlook overnight. The current real estate market has people facing financial hardships.
What can people do when rents have risen 16.33 percent in the past two years? If they're eligible, Section 8 housing assistance could be their saving grace.
Section 8 is a program that offers subsidies to make housing affordable for low-income families. The Department of Housing and Urban Development (HUD), funds the program.
Understanding how Section 8 works is important if you want to accept housing vouchers. Keep reading to learn more.
What are Section 8 Vouchers?
Section 8 vouchers are certifications that someone has qualified for housing assistance and funds are available. In many places, there is a waiting list for vouchers, although people have qualified for rental assistance.
Section 8 Criteria
There are criteria for a Section 8 voucher. You'll need to contact your local Public Housing Agency (PHA), which administers the Section 8 housing program.
Income requirements can't exceed 50% of the median income for your county. PHAs are mandated to distribute 75% of vouchers to applicants with income that’s less than 30% of the median county income. Other criteria include the following:
- Citizenship
- Disability
- Family status
- Displacement
- Eviction history
If someone is eligible for a voucher, they're responsible for 30% of their rent.
Finding Housing
The next step is to search for rental properties. Available units are found on your local PHA website. People can also search for listings in their area. Once they find a property, they present the voucher.
If the property owner accepts Section 8, they provide the amount of the rental to the PHA.
Qualifying to Offer Section 8 Housing
Millions of families and disabled individuals live in Section 8 housing. It's possible because property owners have decided to accept the vouchers. So, what do you do to make your real estate investment property eligible to accept a Section 8 voucher?
You'll need to contact the PHA in your county, as they also certify property owners.
Step 1
The RTA/RFTA form is what landlords must complete to provide details about the unit, such as rent, address, and utility costs. This form can be found on most PHA websites.
While waiting for approval, continue your customary tenant screening procedures.
Step 2
Once your property is approved, you'll need to undergo a HUD inspection. It's required that you adhere to HUD’s Housing Quality Standards.
Step 3
Negotiate the rent. The tenant is responsible for 30% of the monthly rent. The PHA needs to ensure they can meet their financial obligations.
Step 4
After the tenant and the property owner receives approval for the housing unit, you'll sign the Housing Assistance Payments Contract.
Finding Tenants for Section 8 Tenants
Turning your real estate investments into Section 8 rentals is a great idea. Using a property management company is an even better way to ensure your return on investment.
Do you own property in North Carolina and want to learn more? Contact us to discuss whether accepting Section 8 vouchers is suitable for your property.
