Section 8 HUD pricing

4 Replies

After listening to this weeks podcast, it opened my eyes to Listing a rental with Section 8 housing.  Here in San Antonio, I found that the San Antonio Housing Authority (SAHA) breaks down pricing by the zip code and the number of bedrooms.   I only found pricing up to a 4 bedroom.

1. Is there another pricing chart when dealing with 5 or mor bedrooms?

2. If you fix up any house as nice as a flip in a certain zip code, can you automatically rent it for the highest Fair market rent listed for that zip?

3. What does local HUD look for when confirming your rental rate?

If anyone has any experience with SAHA I would love to hear from you.

Thank you for your time.

@Rodger Fore

I heard the same podcast and it opened my eyes to section 8. I have on my list to do more research, and will for sure be following this thread. My father in law was a landlord in the program in San Antonio, but stopped due to tenant issues if I understand the history correctly. Thanks for posting!

HOW SEC 8 RENTS ARE DETERMINED

  • HUD dictates the maximum amount they will pay per bedroom size per market. This is what the HUD chart shows for max rents allowance for every city in our market.
  • You can find the Far Market Rent amounts for every Housing Office in the country on the HUD website at this link. https://www.huduser.gov/portal/datasets/fmr.htm
  • Below is an example of the data that will be displayed.
Res Reader
  • Comparable Rent Test. SEC 8 compares your requested rent to non-SEC8 properties of the same bedroom size, same property type, similar size and age, same city, within 5 miles.

In Hampton Roads all of our cities pay 100% of market rent. Ask your Housing Office what their allowance is so you know how to guesstimate what your rent will be based on rent comps.

Some HAs use an outside vendor to determine their comparable rents. Most HAs, however,do their own comparable rent test analysis by using rent comps from similar units that have rented outside of the SEC 8 program in the same city within the last 6 months. If you have the ability to pull rent comps, print them and use the cover sheet on the next page to submit them with the RFTA.

Comps used have to be within 5 miles of the subject, within the same city, same number of bedrooms (as the unit, not the voucher), same or similar property type (single family, town home, apartment, condo, etc), similar size and similar age. The closer you can get your comps to the property you are submitting, the more likely your HA will use them.

  • Affordability Test. For this test the voucher holder cannot spend more than 30% of their income on housing – rent + utilities.

You could meet your requested rent amount based on comparable rents, but not get approved because the tenant doesn’t have enough income.

To find out more, call your local Public Housing Office to sign up for their next landlord orientation. Try it, you must might like it!

********************************************************************************************************************

RENT COMPARABLE COVER SHEET

RENT COMPARABLES FOR: _______________________________________________________

Tenant Name: ____________________________________________________________________

Date Comps Were Pulled:_____/_____/_____

Source :MLS

Criteria Used:

  • Rented within the last 6 months
  • Located in the City of ______________________
  • Located within 5 miles of Subject
  • # of Bedrooms = __________________________
  • ________________________________________
  • ________________________________________
  • ________________________________________

@Patti Robertson Thank you for the information.  I will have to contact my office.  Here is a screen shot of FMR in my area from the HUD website.  I would want to target 4 bedroom houses for brrrr investing in the are codes with the highest FMR.  With the chart I found, are the amounts that are stated, is that the highest HUD will go for that area?

The number you see on the chart includes total housing budget, which is rent plus utilities. Your building will also dictate budget.  The older it is, the lower they will pay.  The bigger it is, the lower they will pay.  The more exposed walls, the lower the budget.  The more items that require gas or oil the lower they will pay. All of these are because of the estimate of the utility budget that will be subtracted out of the total housing budget.  The more utilities will be, the less money is left for rent.  

Also very pertinent is finding a tenant with enough income to make the rent you are asking for “affordable”. I require a SEC 8 tenant to have a minimum of one times the rent in verifiable, reliable income.

In my market, SEC 8 pays about $250 less than what the HUD chart says - that's the amount they allocate to utilities.