Renting to a Section 8 tenant: how the voucher changes the lease

The Housing Choice Voucher program, still called Section 8 by most landlords, pays part of a tenant's rent directly to the owner through a local public housing agency. The Department of Housing and Urban Development says the program helps more than 2.3 million families rent in the private market. Renting to a voucher holder in Georgia or any other state means signing your normal residential lease plus two federal documents, passing an inspection, and accepting a rent the agency has approved. The lease itself stays yours. What changes is the paperwork wrapped around it and a few rules that override your lease where the two conflict.

Who is involved

Three parties sign something. The tenant signs your lease. You sign the lease and a Housing Assistance Payments contract, called the HAP contract, with the public housing agency, often shortened to PHA. The PHA signs the HAP contract and nothing else. HUD's landlord page describes the split this way: the tenant, the landlord, and the PHA all have obligations and responsibilities under the HCV program. The PHA receives federal money from HUD, screens the family for eligibility, sets the payment standard, inspects the unit, and sends you the subsidy each month. You screen the tenant the same way you screen anyone else. The PHA's eligibility check is about income, not about whether the family will be a good tenant, and HUD leaves tenant screening to the owner.

The inspection

Before the PHA will approve the tenancy, an inspector visits the unit. For years the standard was Housing Quality Standards, and HUD is now moving PHAs to a newer standard called NSPIRE, which stands for National Standards for the Physical Inspection of Real Estate. The inspection covers the basics a code inspector would check: working smoke detectors, no exposed wiring, functioning heat and plumbing, no peeling paint in pre-1978 units where a child will live, secure doors and windows, and no infestation. Units that fail get a list of deficiencies and a deadline. The PHA then reinspects on a schedule, every two years for most agencies, and can stop paying if a deficiency the owner is responsible for goes unrepaired. Plan on the initial inspection adding two to four weeks to your lease-up timeline, and fix the obvious items before the inspector arrives.

The HAP contract

The HAP contract is a HUD form, number HUD-52641, and it runs between you and the PHA only. It states the contract rent, the portion the PHA pays, the portion the family pays, and the term, which matches the initial lease term. It also contains your promises to the PHA: to maintain the unit to the inspection standard, to collect only the approved rent, to not collect side payments from the family, and to give the PHA a copy of any eviction notice you serve. The PHA's payment obligation runs only while the family lives in the unit under an approved lease. Under 24 CFR 982.311, housing assistance payments stop when the family moves out or the lease ends. The HAP contract is not a guarantee of rent after the tenant leaves.

The tenancy addendum

Part C of the HAP contract is the tenancy addendum, HUD form 52641-A, and it must be attached to your lease word for word. This is the document that changes the lease. Where your lease and the addendum conflict, the addendum wins. It sets the initial term, which under 24 CFR 982.309 must be at least one year unless the PHA approves a shorter term, and it lists the only grounds on which you may end the tenancy during the term. It also bars you from charging the family anything beyond the approved family share and any separately agreed charges the PHA has seen. Read it before you sign. Most owners find it mirrors what a fair lease already says; the difference is that the federal version cannot be negotiated.

Rent reasonableness and the payment standard

You propose the rent. The PHA checks it two ways. First, rent reasonableness under 24 CFR 982.507: the rent must not exceed what comparable unassisted units in the area and in the same building rent for. The PHA pulls comparables and can ask you to lower the figure. Second, the payment standard under 24 CFR 982.503, which the PHA sets for each bedroom size between 90 and 110 percent of HUD's fair market rent for the area. The payment standard caps the subsidy, not the rent. A family may rent a unit above the payment standard and pay the difference out of pocket, but 24 CFR 982.508 caps the family share at 40 percent of adjusted monthly income when the family first moves in. If your rent would push the family over that line, the PHA will not approve the unit. Ask the PHA for its current payment standard by bedroom size before you list.

Who pays what

The family pays its share to you on the first of the month like any tenant. The PHA pays its share to you by direct deposit, usually within the first week. Late fees, if your lease has them, apply to the family share only and must be reasonable under state law; the late fee calculator shows the limit for your state. The security deposit is between you and the family, subject to your state's cap; the PHA does not pay it and does not insure it. Utilities follow the lease, and the PHA builds a utility allowance into the family share for any utility the tenant pays. If the PHA's payment is late because of an agency problem, you may not charge the family for it or evict for it.

Source-of-income discrimination laws

Federal fair housing law does not list voucher status as a protected class, so under federal law an owner may decline to participate. Many states and a growing number of cities and counties have changed that with source-of-income laws that treat a refusal to rent to a voucher holder, or a blanket policy against vouchers, as unlawful discrimination. These laws vary a great deal in scope and in exemptions for small owners, so check your state fair housing agency and your city before writing no vouchers in a listing. Even where participation is voluntary, screening a voucher holder by the same standards you apply to everyone else is the safe practice.

Termination rules

During the initial term you may end the tenancy only for cause. Under 24 CFR 982.310 that means serious or repeated violation of the lease, violation of federal, state, or local law that affects the tenancy, criminal activity or drug-related activity, or other good cause. Nonpayment of the family share is a serious lease violation. Other good cause during the initial term generally cannot be a business reason such as wanting the unit for a relative; those reasons become available after the first year. You must give the tenant written notice with the grounds and must send a copy to the PHA. State eviction procedure still applies on top of that, so the notice periods on our nonpayment and lease-violation maps govern how many days the notice runs. When the tenant moves out, notify the PHA the same day, because the HAP payments end with the tenancy and any overpayment will be recovered.

Sources

• HCV Landlord Resources, U.S. Department of Housing and Urban Development
• Office of Housing Choice Vouchers, U.S. Department of Housing and Urban Development
• Housing Assistance Payments Contract, form HUD-52641, U.S. Department of Housing and Urban Development
• 24 CFR Part 982, Section 8 Tenant-Based Assistance, U.S. Government Publishing Office