Section 8

Written by Rental Housing On Line

Section 8 Rental Assistance

The Federal Government in the U.S. has attempted to provide affordable housing to "low income" people since the Great Depression of the 1930s. However, subsidized housing projects were often built or administered poorly, resulting in slums and unsafe conditions for tenants. All too often public housing came to resemble our worst public restrooms; dirty, smelly and sometimes even scary. The Republican Congress elected in the 90's tried to empower tenants with Rent Vouchers allowing them to seek their own housing from private landlords, rather than confining low-income tenants to public housing ghettos.

State and local units of government contract with HUD (Housing and Urban Development) to administrator the rent voucher programs. HUD pays them an administrative fee of about 5% of the funds they use. The contractor screens tenant applicants for eligibility, issues vouchers, contracts with landlords, inspects housing and monitors participants for compliance with HUD regulations.

A Section 8 rental subsidy is a federal payment to a landlord on behalf of an individual tenant. In a Section 8 certificate tenancy, the household pays 30 percent of their income for rent. The difference between 30 percent of the household income and the set "fair market" rent of a unit is paid by the federal government. Certificates have been phased out during the late 1990's in favor of Rent Vouchers.

The Section 8 voucher program varies from the certificate program in that there is not a cap on the rent level. The tenant obtains a voucher for a set amount of money based on the area, and if they are willing to pay more than 30% of their income on rent, they are free to rent a unit that exceeds the "fair market rent" figure used in the certificate program.

Unfortunately, the money available for housing vouchers does not come close to meeting the demand for subsidies. Applications are taken only sporadically and once accepted for the program, people can expect to wait a fair amount of time before they get a rent voucher in their hands.

Tenants have 60 days from the time they receive a voucher to find a house in the area that meets the Section 8 physical requirements, that does not exceed the established rental guideline, and in which the property owner is willing to participate. Sometimes it is possible to get an extension on the 60 days, but sometimes tenants have to return the voucher unused because they cannot locate a unit that meets the requirements.

Qualifications:

The Section 8 program can assist families, single people who are over the age of 62, and people with disabilities. A single woman who is pregnant may also apply for Section 8 housing assistance.
In addition to the overall Section 8 program, HUD also offers two special Section 8 sub-programs:

(1) The program for homeless veterans with severe psychiatric disorders or substance abuse problems,

(2) The Shelter Plus Care program for homeless adults with mental illness.

Discrimination:

Tenants can apply and be on the waiting list for more than one subsidized housing program at a time. They should call the program offices regularly to check on where they are on the list. If they are sitting there much longer than originally estimated and suspect discrimination, they should confront the agency with their suspicions. Also contact government agencies up the ladder from the administrating office.
Tenants can send complaints to local politicians and ask them to investigate the situation. They can also file Freedom of Information Act requests with the Federal Government if they feel information about the administration of federally subsidized housing is being withheld. As with all housing problems, it is important to document your interaction with the different administrators and politicians. Consider using the media to put public pressure on the owner or agency. Fair Housing Centers will investigate discrimination claims with testers. Also check to see if there is a Human Rights Department in your area whose task it is to investigate human rights violations complaints. The program does not discriminate on the basis of sex, race, religion, national origin, age, sexual preference, color, familial status, mental or physical handicap.

Income Limits:

A family/individual must meet the very-low income requirements when they initially receive Section 8 housing assistance. After that, household income may exceed these limits. The most recent income limits (January 10, 1996) are:

Number in Household:
1	2	3	4	5	6	7	8
Max. Gross Income:
12,750	14,550	16,400	18,200	19,650	21,100	22,550	24,000

Income Certification :

Once tenants are in a subsidized program, they must certify their income once a year with their employer or the Department of Social Services. This requirement can also be a protection for the tenant. If you receive Section 8 and your income goes down, your rent should be adjusted down also. You can request an income rectification mid-year from the agency you receive subsidy from and possibly get a retroactive reduction from the date your income went down.

Waiting Lists:

Because of demand for the program assistance, waiting times are hard to predict, but have been as long as four years. As current participants leave the program, assistance is offered to people on the waiting list in order of their date and time of application, and according to "local preferences", or priorities established by Housing Authorities and Community Services Agencies. Despite the likelihood of a long wait, every low income tenant should apply because the program will be worth thousands of dollars a year to them. Eventually, families and households do move to the top of the list.

Until recently, the government did not require landlords to give priority to those most in need. Tenants only had to meet the income eligibility requirement. This has lead to a problem where privately owned subsidized developments do not rent to the people most in need. HUD recently started requiring landlords receiving subsidies to consider the following priorities for giving people housing from the waiting lists:

1. homeless through no cause of your own (i.e., landlord refuses to renew your lease, you are threatened with or subject to physical abuse);
2. currently paying more than 50% of your income for rent and utilities;
3. living in a home that is substandard (i.e., no toilet, plumbing or electricity).

You can ask when applying how the landlord weights the priority list.

Where to Apply:

Tenants may apply at the offices of their state or local Housing Authority and Community Services Agencies. For a listing of state offices, see: http://www.hud.gov/

Housing Choice Voucher Program (HCVP) Section 8 Changed

Premise: HUD has determined that tenants should pay no more than 30% of their household income for total housing expense. They believe that any housing costs over that amount should be subsidized by the federal government.

What's New

On Oct. 1, 1999, the Section 8 certificate and voucher programs were merged into the new Housing Choice Voucher Program (HCVP). The new program creates greater flexibility for subsidized tenants by putting the choice of where to live within much greater control of tenant households. The HCVP has also changed some of the rules, especially relative to the rents the household may pay.

Key differences between the old and new programs.

Under the old certificate program, subsidized rents were held to a standard under which the combined subsidy rent amount, tenant-paid rent and utility allowance could not exceed the permitted fair market rent (FMR) for the housing. Many times, a discrepancy existed between the FMRs and actual market rents. If the FMRs were lower, owners tended to avoid accepting certificates because the tenants were prohibited from paying the difference in rent.

Rental housing owners who needed the occupancy for cash flow purposes and whose tenant population depended heavily on Section 8, had to absorb the lost revenue. For instance, if the certificate FMR was $400 monthly and the actual market rent was $475, the loss of $75 per month in income had a dramatic impact. This lost revenue could even be compounded by the higher public housing authority (PHA) utility allowances that are required to be used if a Section 8 household moves into a private rental unit.

Under the old voucher program, the household was permitted to pay the difference between the restricted rent and the market rent. Using the same scenario, the household could pay the $75 difference so a property owner could maintain cash flow and value. The more flexible voucher program's only rent requirement was "reasonable rent" for the unit.

Those programs have been phased out around the country and replaced with the Housing Choice Voucher Program.
Key components of the new program (24 CFR Part 982) are:

· The Payment Standard: Local PHAs (Public Housing Authorities) set a "payment standard" based on their analysis of the local rental market.

· Rents for Units below Standard: Households that lease units with rents below this standard pay the higher of these options: 30% of their monthly adjusted income, 10% of their monthly gross income, or the PHA statutory minimum rent.

Examples:

· Rents below standard: The PHA sets the payment standard at $400 per month for a two-bedroom unit. A tenant household wants to rent a unit priced at $350 per month, which is below the payment standard. If the household has a gross income of $12,000 and an adjusted income of $10,000, using the new "higher of requirement would mean that the household's portion would be $250 per month, which is the greater of 30% of its adjusted income ($250) when compared to 10% of the household's gross income ($100). The subsidy portion would be $100.

· Rents for Units above Standard: A similar rule applies above the payment standard, but there's a twist. If the household seeks to lease a unit with rent above the payment standard, the same "higher of" standards apply with one additional factor: the household may then pay any additional rent beyond the payment standard as long as its total rent contribution does not exceed 40% of its adjusted income at the time it first receives assistance for a particular unit. After the first year, the household would be released from this 40% requirement and could pay the full difference.

Looking at an example of this situation, and using the same household criteria; if the payment standard is $400 per month, and the Household wishes to rent a two-bedroom for $500, the same household would still be required to pay $250 per month based on the payment standard. The subsidy portion would remain at $100. However, since the rent is higher than the payment standard, the household could pay up to 40% of its adjusted monthly income or an additional $83.33 per month ($10,000/12 x 40% = $333.33) toward the rent of $500. Even at this higher amount, it is clear that the total rent payment would fall short of the $500 rent in the first year.

Source: http://rhol.org/rental/section8.htm

Important Section 8 Resources

Set as favorite

Bookmark

Email This

Trackback(0)

TrackBack URI for this entry