BiggerPockets

NO! That is not permitted and can get you in a LOT of trouble.

Mike

I will not commit fraud and I'm not looking to do anything underhanded. But here is the deal...I talked to a HUD office and they seemed to indicate whatever else the tenant agrees to pay above and beyond what section 8 covers is ok. Am I missing something? Just trying to learn....

Provide a link to the hud website and section you're looking at and we'll see where you are going wrong. This must be talking about something else.

Mike

OK, there are SOME HUD programs, in some markets, that allow the tenant to pay....the key is that it MUST be approved and stated within the HUD contract. No " under the table" deals.

Now I'm confused....In another recent Section 8 thread, it appears that some landlords are getting most of their rent checks from HUD while maybe a smaller portion of the monthly rent is coming from the tenant... Maybe I'm misunderstanding the original question in this thread.... Can someone help me understand? Thank you.

Jim

Atarget, thanks for the reply....what you said is what I was thinking, but what is the discussion about fraud? Wasn't the original question asking if you can charge more in rent than what Section 8 would provide? Again, maybe I'm just misunderstanding the original question...What you indicate is not fraud, so that is why I'm confused...

Thank you.

Jim

so yes- you can rent place out for $ 1000 , get $ 550 hud money and $ 450 form your tenant - provided the tenant agrees to pay $ 1000 for rent - usually they won't pay $ 1000 because their income is not enough(if it was they would buy a house in the first place...) , that's why sec. 8 tenants almost always seek the situation when rent is fully covered by the voucher. to recap : hypothetically you can charge your tenant more, than sec. 8 voucher, also the tenant may " keep the change" from sec. 8 voucher if he/she finds something cheaper ( believe me they won't because govt. only pays as much as is really needed)

This is simply WRONG! I pulled out a copy of the HUD 52641-A Tenancy Addendum, Section 8 Tenant Based Assistance, Housing Choice Voucher Program. This is the addendum that the landlord must sign when they accept a Section 8 tenant.

Paragraph 4 clearly states:
" The initial rent to owner may not exceed the amount approved BY THE PHA in accordance with HUD requirements."

In addition, it says " ...the rent to owner may at no time exceed: the reasonable rent for the unit as most recently determined or redetermined by the PHA in accordance with HUD requirements

Paragraph 5: " The owner may not charge OR ACCEPT, from the family or from any other source, any payment for rent of the unit in addition to the rent to owner."

So, NO, the landlord can not charge the tenant more than the " rent to owner" authorized by Section 8. The tenant may be responsible for paying a portion of that rent, but can not be required to pay more.

Mike

Peter,
I think you hit the nail on the head as to why I was confused. So if I were to have a rental advertised as $600 per month, Section 8 tenant says yes to that price, but HUD only kicks in $500 then the contract would be drawn up so that the section 8 tenant pays the $100 difference. No side bar deals but actual written contract. It sounds like that is legit correct? But the unwritten sidebar deal would be illegal?

Thank you.

Jim

You guys are trying to make it too complicated.

HUd will pay a fixed rate for a 3 bedroom. say $800.. A family with 4 kids comes in and qualifies for a 3 bedroom house. So they get a HUD voucher for 3 bedroom house.

Next, HUD looks at the family's finances and determines how much they can afford to pay for a house (about 1/3 their income.)

HUD determines that the family can afford to pay $200 a month. So the family gets the $800 house that they qualify for, but they must pay the first $200 of the rent and HUD picks up the rest of it.

That is why landlords get part of the rent from the tenant and part from HUD. The landlord is NOT getting $600 from HUD, plus the $200 tenant share, plus another $200 a month extra, unless he like the thought of jail time for himself. If you agrtee to accept teh program, you take it on their terms, not your own.

The HUD fair market remt includes the cost of utilities, by the way, so if you have a3 bedroom house in an area where HUD pays $800 for a 3 bedroom house, you are NOT getting $800 a month for your house unless utilities are included. There is a deduction from the rent amount if utilities are not oncluded.

I agree.. I had to drop my rent from $650 to $600 per month because Sec 8 was only willing to pay up to $600 for a 3 bedroom home. Now based on his earnings, Sec 8 pays $556 and he pays $44. I can not charge him anything more then $600 per month. He wanted a dog for his kids. I had to tell him no, because I was not able to charge any extra for it and I didn't dare take money on the side from him.