The U.S. Department of Housing and Urban Development, or HUD, has several programs that subsidize rent for low-income tenants. Section 8, which, according to the Center on Budget and Policy Priorities, is named for the section of the U.S. Housing Act that authorizes it, is one such program. Section 8 issues vouchers to eligible tenants to offset or pay in full rent for any privately owned home they choose. The benefit to tenants is safe, affordable housing in the neighborhood of their choice. Although landlords appreciate the fact that most or all of the rent payments are guaranteed, as they come directly from HUD, the landlords are responsible for ensuring the homes meet minimum HUD housing requirements.
According to HUD's "Housing Choice Voucher Program Guidebook," landlords must charge Section 8 tenants rent that is deemed reasonable. HUD makes the determination based on rent amounts for similar homes that are not in an assistance program and on rent amounts for rental units on the same premises, such as in a condominium complex. HUD must approve rent increases.
HUD housing landlords must sign one-year leases with tenants. The lease must include the landlord's and tenant's names, the address of the home, renewal requirements and the rent amount. In addition, the lease must specify which utilities, if any, are the tenant's responsibility and which appliances are included in the rental. Finally, all Section 8 leases must include a tenancy addendum, or addition, to the lease. The addendum outlines the rights and responsibilities of both landlords and tenants.
HUD inspects all Section 8 homes to make sure they're "decent, safe and sanitary," according to the "Housing Choice Voucher Program Guidebook." The landlord is required to have the home vacant and the utilities turned on so that the inspector can properly evaluate the structure, including the basement. The inspector uses a checklist to note such items as structural integrity; the functional status of plumbing, heating and electrical systems; the existence of smoke alarms; the air and water quality; and the absence of termites and other pests.
Becoming a HUD Landlord
The process of offering HUD housing as a Section 8 landlord is relatively straightforward. When a tenant with a Section 8 voucher who has viewed the home expresses a desire to rent it, the landlord performs his or her usual screening procedure. Note that Section 8 landlords must obey state and federal fair housing laws that protect tenants against discrimination. If the screening process shows the tenants to be suitable, the landlord contacts his local Section 8 office. The office evaluates the lease and the rent and orders the inspection. After the home passes the inspection, the landlord enters into a contract with Section 8 and signs the lease with the tenants. Moving forward, if the tenants are responsible for any portion of the rent, they'll pay the landlord directly. Section 8 pays the remaining rent and whatever deposits the landlord requires.