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Austin Kinchen
  • Rental Property Investor
  • Baton Rouge, LA
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Section 8 Tenant - Rent Difference

Austin Kinchen
  • Rental Property Investor
  • Baton Rouge, LA
Posted Jan 22 2022, 12:41

I have an existing tenant (inherited) that utilizes the Section 8 program, and I have had a great experience to date with the program/tenant/housing authority. I currently have a vacant 3 bedroom house I am looking to fill, and through the process I have had a few other Section 8 applicants apply. I am still screening them using my standards, but I have run into a bit of a problem and can not find an answer. 

My unit is listed a $1,000 a month, and one applicant has a voucher for $775 (3 bedroom according to her). She said she would cover the difference, but that we would have to put the rent down on the voucher as $775 and then have a notary sign a document saying she will pay the additional $225 each month. I reached out to my contact at the Lafayette Housing Authority (Louisiana), and she told me that charging my tenant anything over their voucher was considered fraud. However their website states, "A housing subsidy is paid to the landlord directly by LHA on behalf of the participating family. The family then pays the difference between the actual rent charged by the landlord and the amount subsidized by the program." Now I am really confused. 

My question is, what is the correct and legal way to go about this? If there is not a way, I do not want to string the applicant along, and I will let her know. However, if it is possible to do this compliantly, then I would like to pursue it. 

Any help is appreciated since this would be my first time placing a Section 8 tenant. 

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Kathy Henley
  • Rental Property Investor
  • St. Louis, MO
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Kathy Henley
  • Rental Property Investor
  • St. Louis, MO
Replied Jan 22 2022, 19:12

@Austin Kinchen If your housing authority has a workshop to teach Landlords how to participate in the program, please go. Local facts are important (income limits for for your area). The housing voucher family pays 30% of its income on rent AND utilities. Therefore, the tenant responsibility of utilities must fit the budget too. The lease agreement will be evaluated. 

Has your dwelling been inspected by the housing authority? If it meets their standards, they may help you find tenants. Your rent rate must be reasonable, determined by the local housing authority. Are you willing to sign a lease at a lower rate? In our area, we cannot collect the gap from the tenant. The Housing Choice Voucher tells us just what the county determined to be the right figure for the applicant, when the voucher was issued, considering income and family size. In theory, they would slowly fall behind on affording the dwelling. Or, it shows that they might have unreported income, which could be seen as fraud.

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JD Martin
  • Rock Star Extraordinaire
  • Northeast, TN
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JD Martin
  • Rock Star Extraordinaire
  • Northeast, TN
ModeratorReplied Jan 22 2022, 19:41

This is going to be location specific. Where I am, a Section 8 tenant can pay the amount beyond the voucher to obtain better housing as long as the housing qualifies for the voucher, and it's all legal. I personally know two people who have vouchers in the $600 range that spend an extra couple hundred dollars each to get a house in a better neighborhood. 

Personally, I'm not a big fan of it for myself. I wouldn't want to be in the position of having to go through an eviction for a tenant that had the voucher portion paid but was falling behind on the overage. The amount of the voucher factors in the individual's ability to pay in the first place, so just by logic a tenant paying more than the voucher is likely to be seriously stretching it. 

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Jeroh Odafe
  • Rental Property Investor
  • Phoenix, AZ
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Jeroh Odafe
  • Rental Property Investor
  • Phoenix, AZ
Replied Jan 22 2022, 22:12

@Austin Kinchen hey Austin. How's laffy taffy? I did my undergrad in ULL. To your question, yes it fraud. I do section 8 tenants too. Just ignore that tenant and go for one that is qualified for your rental amount. You do not want trouble with the city housing.

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Nathan Gesner
  • Real Estate Broker
  • Cody, WY
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Nathan Gesner
  • Real Estate Broker
  • Cody, WY
ModeratorReplied Jan 23 2022, 05:20
It is fraudulent to adjust the rent down on the lease and then have the tenant pay a higher amount "off the books". If they don't qualify, they don't qualify. Trying to fit a square peg into a round hole is how you'll get into trouble.
  • Property Manager Wyoming (#12599)

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Austin Kinchen
  • Rental Property Investor
  • Baton Rouge, LA
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Austin Kinchen
  • Rental Property Investor
  • Baton Rouge, LA
Replied Jan 23 2022, 06:03

Thanks for the feedback everyone. I will move on from this applicant to avoid any potential misstep. @JD Martin brings up a good point about stretching the tenant beyond their means, and @Kathy Henley asking about workshops for landlords is a great idea too. 


@Jeroh Odafe Lafayette is great, but full disclosure I am currently out of state as well, haha. 

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Dan Mcguire
  • Real Estate Agent
  • Shoreham, NY
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Dan Mcguire
  • Real Estate Agent
  • Shoreham, NY
Replied Jan 23 2022, 18:36

I have section 8 tenants. The voucher amount is the rent amount allowed. The s8 office will assign the tenant portion. It is not allowed to charge extra or collect the difference in rent and it’s stated in all their material.

However, it is allowed to charge extra for certain items such as washer and dryer among other fees. We also charge a lock change fee. We use our own lease and attach it to the section 8 paperwork. This requires S8 to review and approve the lease.

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Adrianne Epps
Pro Member
  • Real Estate Agent
  • Mount Vernon, NY
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Adrianne Epps
Pro Member
  • Real Estate Agent
  • Mount Vernon, NY
Replied Jan 23 2022, 21:54

The applicant is asking you to commit fraud. You are not allowed to charge one single dollar over the amount of rent stated in the contracts that you will be required to sign upon lease-up. Not only that, if you make that kind of illegal agreement and the tenant does not pay, you will have absolutely no recourse to collect the money. All tenants are thoroughly informed of the rules at their intake meeting. it is best that you move on and look at other applicants.