What is Section 8? Tips on Managing a Section 8 Property in Grand Rapids, MI
Local landlords and rental property owners ask a lot of questions about Section 8, so today we’re clarifying what Section 8 is, and whether you’re required to accept it. We’ll also share some tips that you might find useful if you accept Section 8 vouchers now or in the future.
What is Section 8?
Section 8 is also known as the Housing Choice Voucher Program and it’s designed by HUD and administered through your local housing commission or housing agency. This program gives vouchers to individuals with low income so they won’t have to pay any more than 30 percent of their income towards rent. Any balance due on the monthly rent is paid by the voucher directly to the landlord.
Can You Accept Section 8?
Yes, you can accept Section 8 tenants in your rental property. If you do accept an applicant with a voucher, you need to be prepared for a few things. First, the local housing agency is going to send you paperwork. Sometimes, the tenant provides it to you directly. This paperwork requests information about the property, including the address, rental amount and information about market rent in the area. You’ll also have to indicate which utilities are included and which ones are required to be paid by the tenant. You also need to provide a W9 to the agency for tax reporting purposes.
Then, they will want to schedule an inspection of the rental property. If you’ve recently had your property certified by the City of Grand Rapids or Kalamazoo, you’re set up very well to pass this inspection. They are very similar and look for similar items.
Are you Required to Accept Section 8?
Familiarize yourself with local fair housing laws. Section 8 vouchers in some areas, including the City of Grand Rapids, are considered a source of income. In Grand Rapids, income source is a protected class and you can’t discriminate based on where the income is coming from. So be mindful of the fair housing laws when you are screening applicants. It’s important to note that you aren’t required to provide all the information required by the housing commission and you don’t have to accept their lease addendums. If you decide not to provide the information or provide the lease addendums, the tenant won’t be approved to live at your property.
Section 8 Tips
If you have a tenant who has used a voucher for at least 12 months and they have completed their lease and they want to renew, you may not be required to hold the maximum rent restriction established by the voucher. You may be able to increase rent to true market value. It’s a good idea to check with the housing agency first.
Utilities included in the rent will increase the maximum rent paid by the voucher and any utilities that the tenant has to pay will decrease the amount. This is typically called a Utility Allowance and it’s factored into the total housing cost.
If you have any questions about Section 8, please contact us at Access Property Management Group.