Section 8 Question

15 Replies

If I close on a MF that has one section 8 tenant (whose lease expires at the end of April) and do not renew the lease, does that automatically mean I am agreeing to take on Section 8 going forward? The MF that I am currently purchasing has one Section 8 tenant who is paying about 1/2 of the current market rent for the area. I do not want to take Section 8 going forward so I have been holding out on closing until her lease expires and she moves out. Should I continue to wait until she is gone?

you must honor the current lease until it expires. you are under no obligation thereafter to accept Section 8 if you don't want. The Section 8 rents for the entire country are on their website at

Thanks @David Krulac I realize I have to honor the lease until it expires that's why I've been postponing my closing for over 2 months now. I don't want to take section 8 going forward so I didn't want to accept it by default by purchasing the property while there was still a tenant in place.

Gosh, close your deal! Contact the PHA or Sec 8 administrator and tell them you are withdrawing from the program but that you will be honoring the existing lease to it's maturity and not renewing. In form that tenant.

Unless there is some state law that gives a tenant the right to renew if they qualify and haven't violated a lease you aren't forced to renew with anyone.

Unless the lease has an option to renew you can terminate it.

Obviously you have preconceived notions about Sec 8, probably ill conceived. You can raise rents so long as the tenant isn't paying more than a third of their income and they pay the difference.

David put up the link, you might study the matter a little deeper. Usually properties that have had Sec 8 tenants are in the location and condition that are "in the market" of Sec 8, saying that non-Sec 8 folks might not be that interested, but that depends on the market and your property, Sec 8 can be an advantage. :)

If I am looking in the correct place (FY 2014 Fair Market Rates) for my zip code, does that mean section 8 would subsidize rents up to that amount? The rent for a 3 bedroom for my zip code says $1250... the current section 8 tenant is paying $650.

that figure includes utilities, you could be getting much more section 8 rent, though the tenant has to qualify for their share and can't pay I think more than 40% of their income above the subsidy.

The FMR is on the HUD site for your MSA/Zip. The tenant may pay up to FMR. How they qualify for Sec 8 assistance is based on the rent and their income and size of family. If you have a single person with one child their assistance will be different than a family of 4. I suggest you contact the Sec 8 administrator and inquire as to what rents you can charge and qualifications. That's the easy way or you can dig through Sec 8 regs. :)

Actually @Bill Gulley this is the only section 8 property in the immediate area (probably could be some SF homes taking section 8). There are brand new town homes backing to the property and more new ones planned nearby. There aren't any other MF properties close by. The only reason there are section 8 now is because the property has been owned by a charitable organization for the last 20 years and they help elderly people when they need housing, through their churches I believe. Most of the tenants were not paying rent at all. This is the only one that pays rent (for whatever reason). I am repositioning the property with all new tenants (a big task I realize), but it's a good area with some good growth planned. However, looking at the Section 8 website, the $1250 market rents are higher than I was planning to charge... I don't know anything about section 8, but maybe I should?

@Bill Gulley I don't believe this tenant has any income other than social security. I don't think it's worth worrying about for one month, unless I plan to take other section 8 tenants. I was just wondering if I should close now or just wait it out until the end of April when she moves out. I am doing a total rehab, so the entire property will be vacant for about 2 months.

@Account Closed ...Schedule an appointment with your local Sect 8 office. We had a rep come to our local REI meeting and a lot of information was clarified. They are not created equal. Some are not as efficient. I have used 3 different offices.(1 mails payment, 2 submits direct deposit). (1 takes forever to inspect, 2 within 30 days). I consider on all properties, but it can be timely...

Once you pull your property you're out, the issues Rolanda points out and new inspections would be necessary to get back in.

You can raise rents, if she doesn't qualify you don't have to renew.

Contact your PHA and learn the ropes. :)

If you want this tenant to move out at the end of their lease and before you close, you need to have the seller give the tenant(s) their notice to vacate as soon as possible being that we're reaching the end of March here soon.

Hey @Account Closed I worked for the San Francisco Housing Authority so I can provide some insight. First, as @Bill Gulley pointed out, contact the housing authority. Each PHA has their own regulations in regards to change of ownership. In SF, if the owner wanted to remove the Sec 8 tenant, the tenants had to be given a 90 day notice to move. It may be more/less in your area. This could save you valuable time if you didn't want to wait till the lease expired.

Second--and this seems more of an FYI since it seems like you're planning on renovating the unit--if you decided to look into section 8, you should get familiar with the payment standard, or as you pointed out the $1245. That doesn't mean they will pay you that amount. They have to do a rental analysis using three comparable non section 8 units in the area. However, in most cases, if you have a four-plex and the other three units are being rented to fair market tenants, you can offer those three lease agreements as evidence of comparable rent. You can get more than the payment standard if there are sufficient comparables, however, most PHAs are unwilling to do so.

Third, elderly section 8 tenants are typically the holy grail of renters. Low turnover, majority of the rent coming from HUD, and less likely to destroy and/or fulfill the (unfair) stereotype of section 8 tenants.

There are plenty of section 8 experts on BP--I would never claim to be one--but if you have any further questions, I'd be happy to answer them if I can. Best of luck on your investment!

Having a new inspection is really no different from the yearly inspections already done. Every Section 8 tenant including renewing tenants have an inspection, and if they have some problem, such as poor housekeeping, they can do quarterly inspections.

@Nicole W. and @Robert Musallam Thankfully, the current landlord has already given the proper notice that the lease will not be renewed. I spoke with Section 8 today and got most of my questions answered.

I appreciate all of the input.

I am glad you got your sights turned around on the

value of Section 8 . Too Good to "Trash" !

However, the concern of the tenant leaving still isn't

addressed. That he the notice requirements have

been met does not assure that the tenant will vacate

timely. Particularly in this case! You brought out the

worst of " complicating factors". Key Words:" Elderly".

" Fixed Income " " Social security" dependent .Combined

these" aggravating factors " can set the stage for a

"hardship- stay" on any Legal remedy required in the

event the tenant has nowhere to go! No court is going

to readily enforce owner's rights in such an instance. I

wouldn't feel secure without some relocation plan for

the tenant. If none, you stand to wait further closed or

not. In any event ,Best of Success on your project!

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