Atlanta Investment Property - Section 8 -
Let's Take A Look At Rules
Atlanta Investment Property - HUD Section 8 is an option.
How does it work?
Public HUD housing buildings are owned by the federal government. Most HUD housing consists of apartments, although there are some duplexes, townhouses and single-family houses. People apply there for living spaces.
For Privately Owned housing:
Section 8 Certificates, issued by Public Housing Authorities (PHA) across the US, allow participants to rent a wide variety of private residence types. These include single-family houses, duplexes, condominiums, townhouses, apartments and even trailers.
Who may use Section 8 benefits?
Those in very low-income households may apply for the Section 8 Rental Certificate program. It offers additional housing choices by allowing families to choose privately-owned rental housing. Families apply to a local PHA or administering governmental agency for a Section 8 certificate. (Infographic above from Glendale, CA Housing Authority.)
While the Section 8 program requires that Tenants to be responsible about caring for the place where they live, the program also requires that the Property Owner be responsible and provide respectful living conditions for the Tenants.
How are rental amounts determined?
The local housing authority does not set the rental amounts in the Section 8 program. Instead, Section 8 beneficiaries agree to monthly rent payments with private Landlords. However, the PHA places limits on the monthly rent amount. These limits depend on the number of bedrooms there and the average rent amounts in the area.
HUD requires local housing authorities to give out 75 percent of its Section 8 subsidies to "households that take in less than 30 percent of their area's median" with a "cut-off at 50-percent-of-median-income". Section 8 Housing uses a set formula to determine the amount of rent.
Who pays the rent to the Landlord?
The Tenant pays one of the following to the Landlord:
a) 30 percent of adjusted income
b) 10 percent of gross income
c) the portion of welfare assistance designated for housing.
The Public Housing Authority of that locale pays the landlord the difference between the 30% of the household's adjusted income [or b) or c)] and the unit's rent. The contract rent must not exceed* the HUD-established fair market rent for the area. HUD pays the PHA in each area an administration fee to cover costs of running the program, including accepting and reviewing applications, recertifying eligibility, and inspecting the rental units. (*There amy be regional differences that vary this guideline.)
The Section 8 Rental Certificate program increases affordable housing choices for very low-income households by allowing families to choose privately-owned rental housing. Families apply to a local Public Housing Authority (PHA) or administering governmental agency for a Section 8 certificate. The administering PHA inspects the housing units to make sure they comply with HUD quality standards.
Between the Voucher and the Certificate programs, over 1.4 million households may enjoy higher quality housing if they meet the HUD and Section 8 Guidelines. The goal is to provide assistance for qualified low-income families so they may live in affordable, decent, safe and sanitary rental units.
What are the Landlord's responsibilities?
The Landlords must receive training about Section 8 Rules and Guidelines. Landlords must agree to accept no more than fair market rent. Certificates are "tenant-based" which means that the qualifying households may use them in any rental unit where the Landlord agrees to participate in the program.
The first time I took the training, I ran in the proverbial other direction! More recently, when I took the training, the rules had evolved. Rents were based on Market Values and Sensible Landlord Inspections were allowed. Tenants could be held responsible for conditions in the rental properties. Total change...
PAST - understanding the past is so important! In the “old” days, Landlords were so heavily restricted on visits to check conditions of the homes and on what could be said to Tenants that generally nothing was known until the people moved out. It was an unbalanced situation that benefited no one!
PRESENT - thankfully, the rules have changed. The first thing one should do is take classes about Section 8 housing. Know what the program offers to see if it is the right investment move for you. Both single family training and multi-family training options are available. The rules and regulations are more balanced and more clearly stated when I took a recent training session — very responsible towards the Tenants and towards the Property Owner.
For Atlanta Investment Property, Section 8 is an opportunity to investigate. If it feels right for you, follow the Landlord Guidelines and Rules. Then, in addition to the Tenant's monthly check, you will receive a US Governent supplemental check for each unit.
Only other responsibility is to think of how to enjoy your new earnings!
Infographic courtesy of Glendale CA.
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