How Does Section 8 Work? A Guide for Tenants and Landlords

Looking to learn about the Section 8 rental assistance program and who it benefits? This guide breaks down everything both applicants and landlords need to know. Come away with an understanding of Section 8 voucher eligibility, waitlists, rental subsidies, compliance factors, and more key details from application to occupancy.

By
Nichole Stohler
|
Last Updated
February 13, 2024
How Does Section 8 Work? A Guide for Tenants and Landlords

Understanding Section 8 housing might seem like figuring out a tricky puzzle, but it's important for both people looking for homes and landlords who want to help. Section 8, created in 1937, helps low-income families, seniors, and those with disabilities find secure, quality housing.

The program is run by local housing agencies and paid for by the government. With Section 8, people get vouchers to help pay for rent, giving them more choices for where to live. But there's a lot to learn about who can get help and what everyone on both sides needs to do to make this possible.

In this guide, we'll explain Section 8 in simple terms, showing its good sides, challenges, and answering common questions. By the end, you'll have a better understanding of how Section 8 works and how it can make a big difference for families and landlords alike.

What is Section 8?

Section 8 is a federal housing program under the Housing Act of 1937 that provides rental assistance to low-income families, seniors, and people with disabilities. The goal is to help these individuals afford safe and decent housing in the private market.

The Section 8 program is funded by the Department of Housing and Urban Development (HUD) and administered by local housing agencies. To qualify, applicants must meet certain income limits — generally, their income can't exceed 50% of their area's median income.

If their application is accepted, the participant receives a housing voucher that covers a portion of their rent each month. With this voucher, participants can rent any unit on the private market as long as it meets program standards, so long as the unit passes inspections and has a reasonable rent compared to unassisted units in the area. Furthermore, the Section 8 program offers more affordable housing choices than traditional public housing projects.

The main advantage of Section 8 is the rent cap that adjusts with the participant's income, making housing more affordable and stable in the long run. Section 8 housing gives low-income families more flexibility and options for safe, quality housing.

How landlords can participate in Section 8

Landlords can apply to offer Section 8 housing and fill vacancies with tenants who receive partial or full rent subsidies from the government. The steps for the rental housing application process are:

Step 1: Understand the program

Before applying, landlords should be aware of how Section 8 works and its impact on rent, housing, and their overall rental business. Local Public Housing Agencies (PHAs) administer the program and require rental properties to meet specific Health and Safety standards set by HUD to qualify.

Landlords receive rent payments directly from the PHA, and tenants are responsible for any rent not covered by their voucher.

Step 2: Contact the local PHA

The next step to becoming a Section 8 landlord is to contact the local PHA. They can provide answers to any questions you have about your specific circumstances.

We highly recommend attending orientation sessions as well, because they cover key details about the program, including landlord obligations, tenant rights, and how to determine rent prices.

Step 3: Property inspection

The rental property needs to pass a HUD Housing Quality Standards (HQS) inspection. This inspection verifies that the property is safe, sanitary, and suitable for living. Common inspection criteria include proper sanitation, reliable heating and plumbing, safe electrical systems, and secure structures. If the rental property fails the initial inspection, the landlord has the opportunity to make required repairs and request a re-inspection.

Step 4: Rent reasonableness determination

The PHA will conduct a rent reasonableness determination to verify that the rent is fair compared to similar, unassisted units in the area. This step ensures the efficient use of Section 8 vouchers and guarantees landlords receive a fair market rate for their properties.

Step 5: Housing Assistance Payments (HAP) contract

Once the property passes inspection and rent determination, the landlord signs a Housing Assistance Payments Contract with the PHA. This contract outlines the landlord's responsibilities, including maintaining the property in accordance with HQS, complying with all fair housing laws, and making sure that the property remains a safe place to live.

Step 6: Finding tenants

Landlords can find Section 8 tenants by listing their properties through the PHA, or by simply labelling them as "Section 8 Accepted". During the tenant selection process, it's important to follow fair housing laws to keep things objective and legal. Once you've screened and selected a tenant, you'll submit a request for tenancy approval to the PHA.

Step 7: Ongoing compliance

Landlords who accept Section 8 housing assistance are required to re-certify the rent reasonableness annually. In addition, the rental property needs to pass periodic inspections. Complying with HQS and the PHA, in conjunction with the promotion of a positive landlord-tenant relationship, will lead to a successful partnership.

Section 8 eligibility requirements for tenants

For tenants looking to apply for Section 8 rental assistance, there are eligibility criteria set both nationally by the HUD as well as locally by the Public Housing Agency (PHA) to keep in mind. We'll cover the main criteria below.

Income limits

The primary eligibility requirement is having an income below HUD-defined limits. The income maximums rely on adjusting the area median income (AMI) percentages for family size. A typical income threshold might look like:

  • 50% AMI for "very low-income".
  • 80% AMI for "low-income".
  • 95% AMI for "moderate-income".

So, for example, if the AMI for a 4-person family is $60,000 in a given area, the 50% limit would be $30,000. A 4-person household earning $32,000 would qualify as low-income at 80% of AMI.

Actual income limits vary widely across the country depending on the local real estate costs and median wages. In high-cost areas, the qualifying total annual gross income can be over $100,000 for a 4-person household at the 80% level. In poorer rural areas, the amount may be as low as $20,000.

Some PHAs also require eligible applicants to be at or below the federal poverty level or have "extremely low income" (30% of AMI). So, income requirements can vary even within the same metro area, depending on which county or city the applicant lives in.

Other eligibility criteria

In addition to income limits, the Department of Housing also requires Section 8 applicants to meet the following expectations:

  1. Have citizenship or eligible immigration status: At least one member of the household must have U.S. citizenship or eligible immigration status, such as legal permanent resident status, refugee status, or asylum status. Non-citizens need to provide documentation proving their status.
  2. Pass criminal background checks: HUD prohibits rental assistance to applicants with convictions for violent crimes, sex offenses, including registration as a sex offender, or recent illegal drug use. Public Housing agencies often do additional screening as well, denying applicants with recent felonies or drug-related criminal records.
  3. Have acceptable rental histories: Housing authorities can deny Section 8 applicants if they were recently evicted from housing for lease violations or if they owe back rent to a previous landlord. During the screening process, PHAs will contact previous landlords and require landlord references to make sure they're admitting a reliable applicant into their program.
  4. Have assets under $100,000: Applicants must report all assets like bank accounts, investments, and real estate holdings. The value, minus certain exclusions like retirement accounts, must be under $100,000. This makes sure that rental subsidies go to lower-income families.
  5. Provide social security numbers: HUD requires social security numbers for all family members age six or older to verify identities. In addition, they'll perform background checks on qualifying family members.
  6. Qualify with the local PHA: Some PHAs have additional eligibility rules based on local housing needs, so applicants should confirm they meet all PHA-specific requirements.

Priority groups

Housing agencies are required to prioritize applicants from certain vulnerable groups. This aims to provide housing assistance to those most in need. These groups include:

  • Elderly households: The Department of Housing gives preference to households where the head of household, spouse, or co-head is 62 years or older. As people age, they often live on fixed incomes after retirement. Elderly individuals may require accessible units or housing near public transit and health services. Prioritizing seniors helps them age in place within their community.
  • People with disabilities: Non-elderly disabled individuals, such as those receiving disability benefits, also qualify for priority status. Applicants must provide documentation verifying their disability. This priority aims to secure adequate housing for those who cannot work due to physical or mental impairments, as stable housing supports their health and independence.
  • Households with minor children: The Department of Housing also prioritizes families caring for dependent children under 18 in the home. The goal is to provide stable housing, which is critical to the health and development of growing children. Consistent housing also facilitates better school attendance and performance.
  • Veterans: Former members of the armed forces receive preference in recognition of their service. Disabled veterans may qualify for special vouchers like Veterans Affairs Supportive Housing (VASH) designated for homeless veterans. Priority for veterans acknowledges their sacrifices and helps with their transition back to civilian life.
  • Victims of domestic violence: Under Violence Against Women Act (VAWA) protections, authorities can move survivors fleeing domestic violence up the list of Section 8 applicants. This priority aims to rehouse victims in safer units free from their abusers. Having a voucher empowers survivors to leave dangerous situations and avoid homelessness.

The application process for tenants

To receive a Section 8 voucher, applicants will need to go through several steps. The application process includes:

1. Locate the local housing authority

Section 8 vouchers are administered at the local level by PHAs. There are over 3,300 PHAs nationwide covering various counties, cities, and communities. Note that applicants must apply directly through their regional PHA, not through HUD.

To find their local PHA, applicants should select their state on the HUD website, which then provides a list of agencies in that state. Larger PHAs may have various subsidiary offices or programs serving particular cities or towns within their jurisdiction.

PHAs can have long waitlists, so applicants that are relocating should consider applying to multiple agencies in other areas they'd consider moving to. Applicants can be on multiple PHAs' lists at the same time.

2. Request an application

Once applicants locate their regional PHA, they can visit its website or office to formally request a Section 8 application.

An increasing number of PHAs are allowing applicants to complete and submit applications entirely online, but some still require picking up a paper application or submitting one by mail.

The application collects basic information on household members, income, contact information, rental history, disabilities, and other details to determine preliminary eligibility.

3. Submit required documentation

Along with the completed application form, the PHA will require applicants to submit various supporting documents to verify all eligibility information. Typical documents needed include:

  • Photo ID: This can be a driver's license, passport, or state ID.
  • Proof of age: Birth certificates, passports, or other proof of birthdate and age for all household members, including children. The local housing authority uses age to determine the appropriate unit size.
  • Social Security cards: A requirement for every member of the household, these are necessary to verify identities and perform required background checks.
  • Income verification: Documents verifying all current income amounts and sources, such as tax returns, recent pay stubs, bank statements showing interest and dividends, pension award letters, and child support details. These confirm the family is within median income limits.
  • Rental history: Contact information, including names, phone numbers, and addresses for current and previous landlords going back several years. The housing assistance agency uses this rental history to assess eligibility.
  • Lease agreements: Providing these gives the PHA a better idea of your rental history.
  • Asset documentation: Bank statements showing current balances of all assets like savings and checking accounts, retirement accounts, and investments. These help the local housing assistance program determine compliance with asset rules.
  • Priority status proof: If applicable, proof of student status, disability, veteran status, or other criteria that may impact priority status for obtaining a voucher.

4. Placement on the waiting list

Applicants are placed on the waiting list once they submit the application and supporting documents for the housing assistance program. If the PHA is not currently accepting applications, applicants will need to wait until the list reopens.

Due to high demand, wait times for Section 8 can range from a few months to years depending on the applicant's location. Larger PHAs serving major metro areas tend to have the longest wait times. A scoring system based on income, local preferences, and application date and time determines the waitlist order.

5. Applicant interview

When the PHA selects applicants from the waitlist, their staff schedules an interview appointment with them. This interview involves:

  • Providing any updates on household composition, income amounts, employment status, or contact information.
  • Submitting any additional documentation requested to re-verify eligibility criteria such as income, assets, and identity. PHAs often require updated documents after long waitlist delays.
  • Answering questions from PHA staff and signing verification forms to certify the accuracy of all information provided.
  • Meeting with a PHA inspector at the applicant's current housing unit if applying for Section 8 for an existing rental. The inspection determines whether the living conditions meet minimum quality standards or if a voucher is urgently needed.

6. Final eligibility determination

After the interview, the PHA will finalize eligibility based on updated information and priority status for that point in time. They will also verify criminal background checks and rent payment history.

If approved for Section 8 rental assistance, the PHA issues a voucher specifying the appropriate unit size and number of bedrooms the household qualifies for based on current family size and composition.

If denied, applicants will receive a written explanation outlining the reasons for their rejection. Denied applicants can appeal the decision through an informal hearing or review process.

Tips for tenants applying for Section 8

The application process for Section 8 can feel long and complicated at times. By following these tips, applicants can maximize their chances of successfully getting approved for a voucher:

  1. Application accuracy: Provide complete, clear, and accurate information on the initial PHA application form. Carefully review your income calculations and make sure all household members are listed correctly. Any errors may delay processing or disqualify your application.
  2. Respond promptly: Be highly responsive to all PHA requests for documentation or information once your application is under their review. Promptly submit any required pay stubs, tax returns, photo IDs, or other requested materials. Return any PHA phone calls or emails within 1-2 business days to avoid delays.
  3. Maintain current details: Make sure your contact details remain current with the PHA while on the waiting list. If your mailing address, phone number, or email changes, inform the PHA immediately so you don't miss out on any time-sensitive notices.
  4. Check your application status periodically: Make sure to check your status on the waiting list regularly to confirm your continued placement and estimated selection timeframe. If needed, ask the PHA what number you are on the list so you know when voucher availability may be likely.
  5. Renew annually: Some local PHAs require that applicants reconfirm their ongoing interest and eligibility each year, so check whether this is the case for you. If it is, make sure to renew your application annually to remain active on the list.
  6. Apply to multiple PHAs: Consider applying at multiple PHAs in areas you'd consider relocating to before voucher issuance. Transferring to new waitlists can help you retain your place should you need to move.
  7. Keep detailed records: Keep copies of all application forms, letters, emails, and documentation submitted to or from the PHA. Maintaining thorough records protects you if any issues arise.

Using the Section 8 housing vouchers

Once an applicant is approved, the PHA issues them a housing choice voucher. This voucher formalizes the PHA's commitment to provide financial rental assistance on the recipient's behalf. Here's how utilizing a Section 8 voucher works:

Voucher details

The voucher specifies the unit size and number of bedrooms for which the household qualifies based on family size and composition. For instance, a family of 4 would be eligible for a 3-bedroom voucher.

It also lists the maximum rent amount the PHA will cover through the subsidy. The recipient is responsible for any rent above the voucher amount.

Housing unit requirements

Voucher recipients have a considerable amount of flexibility when it comes to choosing a rental unit. However, the unit must meet the following requirements:

  • Reasonable rent: Have rent reasonable compared to similar units, as determined by the PHA.
  • Pass inspections: Pass initial and periodic inspections for safety, sanitation, and habitability.
  • Landlord compliance: Have a landlord willing to comply with Section 8 program requirements, including automated rent payments and non-discriminatory practices.
  • Appropriate size: Be appropriately sized for the number of occupants per PHA standards to avoid overcrowding.
  • Affordable: Be affordable, with total tenant-paid rent and utilities not exceeding 40% of the household's adjusted gross monthly income.

Voucher payment to the landlord

The PHA pays the landlord directly each month. Tenants pay their portion to the landlord as well. If a tenant's income changes, the PHA payment is adjusted to match the new income.

The housing assistance payment and tenant contribution amounts follow specific guidelines:

  • PHA payment cap: The PHA voucher payment is determined based on a cap of 40% of the recipient's monthly adjusted income.
  • Tenant contribution: Housing voucher program recipients are responsible for paying at least 30% of their monthly adjusted income directly to the landlord as their share of rent.
  • Income change adjustments: If the recipient's income changes at any point, the PHA adjusts their share of the payment, while keeping within the 40% income cap.

This process of split payments continues as long as the Section 8 recipient remains eligible for housing support and lives in the rented unit.

Housing search period

Applicants must locate a qualified rental unit to use their voucher within 60-120 days after they receive the voucher. The PHA may grant extensions if the tenant has challenges finding subsidized housing, but this will be determined on a case by case basis.

The PHA may provide search tools and lists of landlords that accept vouchers to make the search process easier. There are also apartment listing sites, such as Rentals.com, that specify landlords who accept housing choice vouchers.

Moving as a Section 8 voucher recipient

Voucher recipients can move to a new rental unit after their initial lease term and take their Section 8 voucher with them as long as they continue following program rules. However, moves are limited to once per year. Recipients must give the PHA and their landlord proper notice before moving.

Advantages and challenges of Section 8

While the Section 8 housing voucher program provides valuable assistance for low income households, it's important to consider the drawbacks before making any decisions on whether to participate.

Advantages

Participating in Section 8 can offer numerous advantages like more flexibility in choice of neighborhood, rent affordability, and reliable payments.

For tenants:

  • Neighborhood choice: Gives tenants more freedom to choose rentals in their preferred areas and avoid high-poverty neighborhoods, broadening access to communities with potentially better schools, amenities, and employment opportunities.
  • Affordability: Automatically adjusts the subsidy amount if a tenant's income decreases, helping to keep housing affordable.
  • Safe living environment: Enables tenants to leave substandard housing and seek better accommodations, since the voucher assistance program incentivizes landlords to maintain and manage their properties effectively.

For landlords:

  • Guaranteed rent payments: Landlords receive consistent and reliable rent payment through direct deposit from the PHA, reducing concerns over late or missed payments.
  • Fair market rents: Allows for annual rent adjustments based on market conditions, offering landlords the potential to receive competitive fair market rent while participating in the program.
  • Expanded tenant pool: Provides access to a larger pool of potential tenants, increasing occupancy rates and reducing vacancy periods.

Challenges

Section 8 is not without its difficulties. Both tenants and landlords face complex administrative processes, availability limitations, and the potential for discrimination.

For tenants:

  • Housing discrimination: Tenants can run into challenges with landlords who are reluctant to accept vouchers due to negative stereotypes, although this most likely violates the Fair Housing Act, allowing you to pursue legal action against discriminatory landlords.
  • Limited options: Tenants often face a scarcity of units that both comply with the PHA's quality standards and fall within affordability criteria, narrowing available choices and frequently resulting in prolonged searches for appropriate housing.
  • Administrative burden: Tenants deal with the complexity of both initial and recurring inspections, extensive paperwork, and stringent compliance requirements. For voucher holders, this can be both time-consuming and deterring from applying for the program.

For landlords:

  • Administrative hassle: Adhering to Section 8 regulations, including conducting property inspections, meeting maintenance requirements, and managing paperwork, presents challenges for landlords, who may perceive these tasks as burdensome.
  • Rent limitations: An apartment might be worth more than what a landlord is permitted to charge for it, limiting profitability.
  • Occupancy delays: Landlords experience delays in tenant move-in dates because of the time spent conducting the required property inspections and going through the approval processes, which can delay receiving rental income as a result.

Renting with Section 8

For tenants, Section 8 housing provides the key benefit of affordable rents that adjust to income changes over time. However, recipients should be aware that long waitlists and complex documentation are common, frustrating challenges.

For landlords, participating in Section 8 offers benefits like guaranteed tenant payments from housing authorities and possible tax incentives. However, property owners should factor in requirements like unit inspections, rent caps, and voucher limits as they consider opting into assisting renters in need.

While administrative responsibilities exist for both parties, the housing choice voucher program aims to mutually serve lower-income households while encouraging landlord participation through standardized terms and consistent occupancy. All participants play a role in successfully providing and utilizing housing subsidies where economic need exists.

How does Section 8 housing work? FAQs

How are Section 8 voucher amounts determined?

Local housing authorities determine Section 8 voucher amounts based on factors like family size, income, and rental costs in the area. The voucher covers a part of the rent, usually 30% of the family's adjusted income.

How are Section 8 voucher payments made?

Section 8 voucher payments are made directly to landlords on behalf of the voucher holder. The housing authority deposits the subsidy amount each month into an account or mails a check for the tenant's portion of rent as determined by the voucher.

The tenant pays their portion to the landlord, but the housing authority pays its share directly. The landlord must also sign a Housing Assistance Payments Contract, which guarantees they receive the Section 8 subsidy directly.

Can I use my Section 8 voucher for a roommate?

Typically, no, Section 8 vouchers are assigned to a specific household and can't be transferred to a roommate. The voucher holder needs to consult their housing authority to inquire about exceptions to adding a roommate to the voucher.

Nichole Stohler

Nichole co-founded Gateway Private Equity Group, with a history of investments in single-family and multi-family properties, and now a specialization in hotel real estate investments. She is also the creator of NicsGuide.com, a blog dedicated to real estate investing.

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