Govmit shutdown affecting your section 8 payments ???

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Govmit shutdown affecting your section 8 payments ???

Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

Never know what to believe. News this morning was talking about section 8 payments no being made and section 8 appealing to landlords not to evict .. I don't think many would evict over one missed payment given the situation.  section 8 tenants rarely have savings to make up rent that govmit fails to make..

Anyone experiencing this ?

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Joe SplitrockPro Member
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Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
7y

I just replaced carpet in one of my rentals and I got it installed the day after they measured. One of their installers is a federal employee by day and does flooring on the side. Since he out of work, he has been taking extra jobs to fill the time. Most likely he will also get back pay for his time time off work, so he told me it is a good deal for him. I was surprised he wasn't mad about it.

This is probably a good lesson for everyone, that you should always have multiple income streams. Call it a side job, side business, side hustle, whatever. No job is safe, which is why I got into rental properties.

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  • Jay HinrichsBusiness Member
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    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Mark Hughes:

    @Brian Ploszay but don’t tenants typically pay their portion directly to the govt and then the full payment comes from govt? So if the govt is shut down will they record this and their partial payments won’t be sent to landlords in the meantime until it’s all sorted out.

     Could vary but all ours paid us directly. Or should I say rarely or sporadically 

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  • Brian Ploszay
    Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
    7y

    @Mark Hughes    In my market, we have to collect the tenant's portion.  I never considered that other markets would do this differently.  I like the idea of the tenants paying directly to the Gov.

    2Reply
  • Charles Worth
    Investor · New York City, NY · Member since 2015 · 808 posts · 417 votes
    7y

    @Brian Ploszay ya right the govt in Chicago collecting rent thats funny, they can't even manage to get actual vouchers done right. Collecting portions is a pain, without someone with a vested interest it would be really really hard. I have heard every excuse in the book and forget it if they have a problem that month with something breaking. 

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  • Charles Worth
    Investor · New York City, NY · Member since 2015 · 808 posts · 417 votes
    7y

    By the way my understanding is that actual vouchers that exist today were funded for a period of time. new contracts and vouchers are a problem as will be reaching someone at section 8 for customer service. 

    0Reply
  • Jay Chen
    Member since 2019 · 2 posts · 0 votes
    7y
    @Jay Hinrichs , I would still ask for the tenants to come up with their portion of the rent, and ask the tenants to make up the difference and see if the government will reimburse in the near term. But I will still be seeking replacement renters just in case. They fall behind too much. Still Serve the pay or quit notices just to have all processes in place if need be. Of course keep friendly communication channels. As a business we have our obligation as too.
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  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
    7y

    There doesn't appear to be an immediate issue with monthly rent payments from local housing authority (HA) providers who pay landlords. Not this month at least. 

    For S-8 landlords (and wanna-be landlords) the that you or your agent signed has many of your questions answered. If payments are missed next month, the local HA isn't responsible for paying late fees to landlords because the HUD funding issue is (per ) beyond the local housing authority's control. In NC, state law explicitly () limits late fee payments to "...the tenant's share of the contract rent only, and the rent subsidy shall not be included."

    It's going to get ugly if this persists for another 21 days. 

    2Reply
  • Donna DeRosa
    Real Estate Agent · Braintree, MA · Member since 2015 · 10 posts · 0 votes
    7y

    All housing payments were received on rentals for the month of January. 

    0Reply
  • Nancy P.
    Naperville, IL · Member since 2018 · 330 posts · 357 votes
    7y

    She got married and left Section 8 program, but when I had an S8 tenant in DuPage County, IL, the lease SPECIFICALLY said we could not evict if the government didn't pay its share. Which makes sense, it wouldn't have been HER fault. But when she left, we decided not to do S8 anymore. Illinois is in enough of a financial mess that we feel we risk losing a lot based on them, let alone the Feds. She lived there 3 years, 4 times HUD didn't pay until I called and they would say "oops". Never any reason.

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  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    7y
    Originally posted by @Account Closed:

    @Joe Splitrock no side hustle jobs when you’re active duty military, still have to go to work, and don’t get paid lol

    I have seen many active duty military that have rental properties as a side hustle. Some will buy a house wherever they relocated to, then convert to rental when they reassigned. Something for you to consider. 

    I don't agree with making anyone work without being paid. Military personnel should have permanent funding, similar to what the President, Senators and Representatives have.

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  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Jay Chen:
    @Jay Hinrichs , I would still ask for the tenants to come up with their portion of the rent, and ask the tenants to make up the difference and see if the government will reimburse in the near term. But I will still be seeking replacement renters just in case. They fall behind too much. Still Serve the pay or quit notices just to have all processes in place if need be. Of course keep friendly communication channels. As a business we have our obligation as too.

    you can ask for sure.. but those that are veteran section 8 land lords will tell you this will fall on deaf ears..  really depends on the rental stock.. and area..  I get the point but I don't agree with it.. this will end in time  why get sideways with your tenant  

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  • Dennis Pressey Jr
    Specialist · Philadelphia, PA · Member since 2014 · 231 posts · 69 votes
    7y

    Trusting the government is literally the definition of insanity. Payments are still coming through on-time at the moment, but that won't last forever, thats a mathematical certainty.

    1Reply
  • Account Closed
    Miami, FL · Member since 2018 · 55 posts · 24 votes
    7y
    Originally posted by @Joe Splitrock:
    Originally posted by @Account Closed:

    @Joe Splitrock no side hustle jobs when you’re active duty military, still have to go to work, and don’t get paid lol

    I have seen many active duty military that have rental properties as a side hustle. Some will buy a house wherever they relocated to, then convert to rental when they reassigned. Something for you to consider. 

    I don't agree with making anyone work without being paid. Military personnel should have permanent funding, similar to what the President, Senators and Representatives have.

    0Reply
  • John Hickey
    Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    7y

    whats the plan if it goes on for 6 months.

    One of two main reasons I have zero interest in section 8. The guaranteed money is Good for those that like it. I’m sure you’ll get your money this time around.

    maybe take this opportunity to start moving towards free market. There is no such thing as guaranteed money. In nothing. No pension no bank no government is guaranteed. They might make every payment in our lifetimes then one day they won’t.

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  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @John Hickey:

    whats the plan if it goes on for 6 months.

    One of two main reasons I have zero interest in section 8. The guaranteed money is Good for those that like it. I’m sure you’ll get your money this time around.

    maybe take this opportunity to start moving towards free market. There is no such thing as guaranteed money. In nothing. No pension no bank no government is guaranteed. They might make every payment in our lifetimes then one day they won’t.

    section 8 is not guaranteed there are many ways these tenants lose their vouchers mid stream.. 

     they were found to be fibbing about their income and voucher gets cut or stopped.

    not often but it does happen I know its happened to us many times. but we had a lot of them..  and many times they change the voucher amount from year to year.. and if they lower it the tenant may have trouble paying the higher co pay.. 

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  • Jonathan R.
    Investor · Wichita, KS · Member since 2017 · 584 posts · 813 votes
    7y
    Originally posted by @John Hickey:

    whats the plan if it goes on for 6 months.

    One of two main reasons I have zero interest in section 8. The guaranteed money is Good for those that like it. I’m sure you’ll get your money this time around.

    maybe take this opportunity to start moving towards free market. There is no such thing as guaranteed money. In nothing. No pension no bank no government is guaranteed. They might make every payment in our lifetimes then one day they won’t.

     I agree the program has no certainty to go on forever. It’s only been around for 44 years. 

    The key is to always be prepared to pivot in real estate. You have to work with what the market is giving you. Right now I think this niche is profitable, I’ll stay focused for the time being.

    1Reply
  • John Hickey
    Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    7y

    @Jay Hinrichs yep I agree.  I’m in the process of repositioning a portfolio of buildings.  When I purchased it the makeup was 3/4 social service clients.  As I go I’ve neen doing renos and renting freemarket. PM found a few new  S8 in the beginning.  I rethought that later.  Not bad tenants but not my favorites either.  I’m down to about 10% at this point.  

    1Reply
  • Michal Kolenda
    Member since 2017 · 26 posts · 10 votes
    7y

    I'm still patiently waiting for my transfer paperwork to go through. They say it takes 30-60 days and i'm about 35 days in. I inherited 2 section 8 tenants in a 3-unit building that I'm occupying...so I'm probably going to hold off on renovations until the checks start coming. 

    0Reply
  • Jordan Callaway
    Real Estate Broker · Chicago, IL · Member since 2016 · 54 posts · 51 votes
    7y

    @Meghan McCallum +1 on you previously being underpaid & thank you for your service! let's do a deal soon!

    1Reply
  • Michael Giuffre
    Rental Property Investor · Raleigh, NC · Member since 2015 · 51 posts · 15 votes
    7y

    Adding my experience here in case it helps fellow Sec. 8 landlords: I recently completed a duplex rehab and placed Section 8 voucher holder tenants in both sides last week (January 10th/11th, so during the government shut down).  This was in Durham County, North Carolina so your mileage may vary, but I never received any indication that the process was hampered by the shutdown in the least.  It took me about 10 days to request and hold inspections, sign tenant leases, and execute HAP contracts with the Housing Authority.  Hopefully we don't get to the point where landlords aren't able to get new Section 8 leases executed with their local Housing Authority but my recent anecdotal evidence bodes well for us, at least for the time being.  My January rents for existing Section 8 tenants at other properties were also paid on time.

    I called my Housing Authority to inquire about February rents as well, and they indicated that they will be paid according to normal procedures and timelines (i.e. 1st-5th of the month direct deposit), and that no additional information is available for March onward at this time.

    Hope this helps calm some fears of a spectacular show of Section 8 chaos :)

    2Reply
  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
    7y
    Originally posted by @Michael Giuffre:

    Adding my experience here in case it helps fellow Sec. 8 landlords: I recently completed a duplex rehab and placed Section 8 voucher holder tenants in both sides last week (January 10th/11th, so during the government shut down).  This was in Durham County, North Carolina so your mileage may vary, but I never received any indication that the process was hampered by the shutdown in the least.  It took me about 10 days to request and hold inspections, sign tenant leases, and execute HAP contracts with the Housing Authority.  Hopefully we don't get to the point where landlords aren't able to get new Section 8 leases executed with their local Housing Authority but my recent anecdotal evidence bodes well for us, at least for the time being.  My January rents for existing Section 8 tenants at other properties were also paid on time.

    I called my Housing Authority to inquire about February rents as well, and they indicated that they will be paid according to normal procedures and timelines (i.e. 1st-5th of the month direct deposit), and that no additional information is available for March onward at this time.

    Hope this helps calm some fears of a spectacular show of Section 8 chaos :)

    An FYI only (related to your post,) with some quotes from the CEO of the Durham Housing Authority. 

    2Reply
  • Randy E.
    Rental Property Investor · Durham, NC · Member since 2014 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Michael Giuffre:

    Adding my experience here in case it helps fellow Sec. 8 landlords: I recently completed a duplex rehab and placed Section 8 voucher holder tenants in both sides last week (January 10th/11th, so during the government shut down).  This was in Durham County, North Carolina so your mileage may vary, but I never received any indication that the process was hampered by the shutdown in the least.  It took me about 10 days to request and hold inspections, sign tenant leases, and execute HAP contracts with the Housing Authority.  Hopefully we don't get to the point where landlords aren't able to get new Section 8 leases executed with their local Housing Authority but my recent anecdotal evidence bodes well for us, at least for the time being.  My January rents for existing Section 8 tenants at other properties were also paid on time.

    I called my Housing Authority to inquire about February rents as well, and they indicated that they will be paid according to normal procedures and timelines (i.e. 1st-5th of the month direct deposit), and that no additional information is available for March onward at this time.

    Hope this helps calm some fears of a spectacular show of Section 8 chaos :)

    good info

    0Reply
  • Account Closed
    Rental Property Investor · Oakland, CA · Member since 2014 · 730 posts · 1k+ votes
    7y

    statement from my local housing authority (Oakland). They state they have enough money to go through March, and after March, they intend on taking out loans to ensure payments are made. <phew>

    ---------

    "Section 8 Housing Assistance Payments and public housing operating subsidy was made by HUD to the Oakland Housing Authority (OHA) in January 2019, and HUD states they will be made in February 2019. In March, HUD has stated, there will be no more available Federal funds and no housing assistance for any program will be made. If no HUD funds are available to be distributed in March, there will be severe impacts to families and property owners assisted by any HUD programs across the nation (Section 8, public housing, Multifamily Project Based Rental Assistance, and a host of other smaller programs). The monthly housing assistance and operating subsidy required for OHA to continue to make payments for units in Oakland under both the Section 8 and public housing programs are just over $22 million dollars per month. At OHA we will first use all funds that we have available to continue to meet our obligation, and anticipate having funds to make housing assistance payments in March. Beyond March, we are looking at securing loans to continue to pay our owners and preserve the tenancy of our participants for as long a possible."

    1Reply
  • Michael Giuffre
    Rental Property Investor · Raleigh, NC · Member since 2015 · 51 posts · 15 votes
    7y
    @Chris Martin Thanks for sharing this article. Very pertinent to several of my rentals! Fingers crossed for ending the shutdown soon...
    0Reply
  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Michael Giuffre:
    @Chris Martin Thanks for sharing this article. Very pertinent to several of my rentals! Fingers crossed for ending the shutdown soon...

    I think it will all be moot.. you would have absolute social unrest if this came to pass  IE feds default and a bunch of folks who have relied on the govmit for housing Tenants and landlords for payment.  there would be blood in the streets.  

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  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
    7y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Michael Giuffre:
    @Chris Martin Thanks for sharing this article. Very pertinent to several of my rentals! Fingers crossed for ending the shutdown soon...

    I think it will all be moot.. you would have absolute social unrest if this came to pass  IE feds default and a bunch of folks who have relied on the govmit for housing Tenants and landlords for payment.  there would be blood in the streets.  

    Isn't that the plan? Sure seems like it. I'm not trying to be funny, but the "disruptor" factor is in play here... bigly. 

    1Reply
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