The cost of housing has increased substantially over the last 10 years and there doesn’t seem to be an end in sight. These increased costs are making it more, and more challenging for families to purchase or rent housing. Recent research conducted by the Federal Reserve shows that the average American household spends approximately 56% of their income on housing costs per month.
Section 8 housing vouchers afford tenants the opportunity to live in comfortable housing that is suitable to their needs without the heavy paycheck that comes with conventional housing. This win-win solution allows investors a chance to occupy their property with vetted tenants, enjoying reliable payment through their Section 8 real estate.
What is Section 8 Housing?
Section 8 assists low-income renters who are in need of housing. Part of the Housing and Community Development Act of 1974, and administered by the local PHA (public housing agency) in 50 states Section 8 is a viable, safe option for those in need of housing. Housing availability is dependent on income and family size, as well as strict economic criteria. Once approved for Section 8, rental vouchers are supplied to you, the tenant. These vouchers cover up to 70% of your monthly rent and utility costs will be covered.
How Section 8 Real Estate Works
Below is an overview of how Section 8 Real Estate works. This will help you understand how these housing vouchers assist tenants as well as investors.
Tenant-based Section 8 vs. Project-based Section 8
- Tenant-based Section 8 vouchers are not attached to a specific property. Once obtained, strict vetting and requirements are enforced to protect both the tenant and the landlord.
- Unlike Tenant-based vouchers, the Project-based Section 8 vouchers are attached to a specific property. This means that when a tenant moves the Section 8 voucher works for the next tenant to occupy the property.
How tenants qualify for Section 8
According to State PHAs, people are eligible for Section 8 depending on their family size and combined incomes. This assistance is available to U.S. citizens and certain categories of non-citizens who have eligible immigration status.
Note that the total income of each family should not exceed 50% of the median income for the area or State they live. PHAs are responsible for offering 75% of their vouchers to those people who have income that doesn’t exceed 30% of that area’s median income.
Those wanting to apply for Section 8 will need to provide information on family income, assets, and family composition. Once the PHA is provided with this information and verifies it, the relevant program eligibility and the amount of housing assistance payment is determined.
Tenants, landlords, PHA, and HUD all play specific roles in Section 8 housing:
Tenant: The tenant signs a minimum of a one-year lease with the landlord once the PHA approves a rental property. Based on local housing law, the landlord may request a security deposit. At renewal, the landlord and tenant can agree to extend the rental period.
Landlord: the landlord must offer the Section 8 tenant a well-maintained, safe, and livable property for Section 8 tenants. This property should be provided at a suitable rental rate.
PHA: The PHA is responsible for inspecting the quality standards of the house, examining the tenant income, as well as auditing the applying family’s composition. The PHA is also responsible for inspecting and regulating both the tenant and landlord when it comes to the upkeep and maintenance of the property.
HUD: The HUD follows all PHA programs and ensures all rules, and regulations are properly handled. The HUD also delivers funds to the various PHAs for housing payments and assist in reviewing all PHA applications for other funding services.
Pros and Cons of Investing in Section 8 Real Estate
Still not sure if Section 8 housing is for you?
Pros of Section 8
- Stable rental income on a monthly basis. The government pays up to 70% of the tenant’s rent as well as all utility bills.
- As tenants can stay in the same house and renew it every year, vacancy rates become lower in Section 8.
- The HUD allows owners to establish higher occupancy rates.
- With Section 8 real estate, marketing costs tend to be lower.
Cons of Section 8
- The length of the approval process can be taxing for applicants.
- Rigorous inspections of Section 8 properties are required annually for the benefit of the landlord and tenant.
- Property owners need to conduct the same tenant application process, background checks that are used for non-Section 8 tenants.
Turn to Central Office HCV Those interested in Section 8 Housing for Rent Albany NY, can trust the Central Office HCV advice and assistance. The team is dedicated to providing you with comfortable, safe, and reliable housing that suits your needs. The Central office also offers Section 8 Housing Hamilton County NY. Contact the Central Office HCV to find out if you are eligible for Section 8 Housing for Rent Albany NY and if there is a suitable property available for you.