Section 8 VS HUD VS Rural Development? Difference?

Question

I am wondering what the differences are between a section 8 tenant, and properties that rent is covered by HUD and Rural Development. I was told HUD federally owns the units? So more rent? But you own the buildings? Is someone here able to clear this up. Thanks!

Kelly Mahon · Answer

The properties were in the RD program and it was finaced through the RD proram. When the loan was paid in full then the property was taken out of the program. It takes 6 months to get ouyt of the proram and we had to notify all tenants and have them sign up with the local HRA program. The county HRA notifies us if a tenant does not quilify and also direct deposits to the account. There is a cap on HRA and it is set by the county.

Andrew Michaud · Answer

You can simply just convert a property from HUD or RD to Section 8? Is it a big job? Is the properties mortgage financed through RD vs a bank? Is HUD/RD rents higher than Section 8 vouchers as its all government housing? Is there monthly overhead headache on management of RD/HUD vs the Section 8/Market Rents route?

Kelly Mahon · Answer

We just took over a RD built 24 units (3 8plexs). The RD program is income based and if you go over tenants making to much income the loan rate goes up. We took the buildings out of the program and had the tenants switch to Section 8. Now that we did that we can still have market rate and the Section 8 voucher tenants are paid directly to our account every first of the month. This program seems to work the best for us.

Emma Powell · Answer

Section 8 just means they're using some sort of federal housing assistance, and they can bring that voucher to any community. they usually get approved for a certain amount, so they often want to look at places where their voucher completely covers the rent, or as much as possible. In a HUD community, the entire tenant base is on housing, and no market-rate tenants are allowed. The loan is held by HUD. We've looked at a few of these, but the brain damage getting a HUD loan or taking over a HUD property was more than I wanted to commit to unless I was SURE I could raise the capital for the project, which I am never sure of!