Section 8 is a special housing program available through the Department of Housing and Urban Development. Housing vouchers are provided to certified landlords and ensure investors receive monthly rental income.
Section 8 is offered to low-income individuals and families to provide suitable housing for those who cannot afford to pay rent without government assistance. In order to obtain HUD housing vouchers, applicants must earn less than 50-percent of their states’ median income.
The Public Housing Authority is required to provide 75-percent of available Section 8 housing choice vouchers to applicants earning less than 30-percent of the median income, while the remaining 25-percent are provided to those earning 50-percent or less.
Applicants often must wait up to one year before Section 8 approval is granted. Upon approval, housing voucher recipients must rent HUD certified properties. Applicants are placed on a waiting list until suitable housing becomes available.
Recipients must reapply for housing benefits annually. Any changes to income or family dynamics must be reported to the Public Housing Authority. Changes include: births, deaths, divorce, or when any member moves out of the residence.
Real estate investors that want to participate in HUDs housing program must submit a Request for Tenancy Approval application to their local PHA office. The Department of Housing and Urban Development provides a list of Public Housing Authority offices via their website at HUD.gov.
Once approved, investment properties must undergo HUD inspection and certification. When properties pass inspection, landlords must enter into a one year contract and adhere to established Section 8 protocol. Each rental property must pass HUD inspection and be recertified annually.
Section 8 properties must provide adequate ingress and egress, running water, electricity, gas, heating and air conditioning, and proper sanitation including a sink, toilet, and bathtub or shower.
Rental properties must provide one bedroom per two residents, along with a bathroom and kitchen. Section 8 homes include single- and multi-family residences, condominium units, apartments or townhomes.
Real estate investors often find Section 8 housing an attractive option because the program provides consistent cash flow. Housing voucher recipients often make great long-term tenants who reside in rental properties for years to come because locating appropriate housing through HUDs program can be challenging and long waited.
Once investors are accepted as a Section 8 landlord they must strive to remain in compliance. In addition to HUD housing voucher regulations, investors must also comply with the Fair Housing Act. Failure to comply will result in termination from the program.
Real estate investors may qualify for the low income housing tax credit which provides a dollar-for-dollar tax deduction from federal tax returns. Investors should consult with a real estate tax attorney to ensure they comply with IRS regulations.
While the approval process can be time-consuming and complex, Section 8 can provide landlords with quality tenants and help tenants locate quality housing; creating a win-win situation for all parties involved. Individuals in need of housing assistance and property owners interested in becoming a Section 8 landlord can obtain necessary information via HUDs website.
California real estate investor, Simon Volkov offers a variety of real estate and low income housing information via his website at www.SimonVolkov.com. Topics include: Section 8, foreclosure prevention, real estate short sales, real estate investing, and more.
|
|