3 times income to rent for section 8/vouchers?
Investor · Member since 2020 · 110 posts · 33 votes
I've read you should require 3 times the income for your rental price.
Do you apply this to section 8/HCV?
Or do you submit each application and see what the government will pay you and go from there?
If their voucher covers their rent, you can still make them pay for their utilities?
thanks
Update in 2022. I’ve seen where it looks as if Jennifer from LA has answered this question correctly. Yes, to be correct housing vouchers cover majority of the tenants rent. As tenants are not supposed to pay more than 30% of their income in bills and 40% being the most they could pay in bills after a year! So for example if a tenants income is $100 every month the tenant would pay a portion of $30 directly to their landlord ( the rent portion is also known as the Total Tenant Payment- TTP ) which goes directly to the landlord from the tenant, and the housing choice voucher would cover the remaining $70 to the landlord monthly. If a tenant is looking to rent from an apartment community, realtor, or private owner and the income requirement is 3*s the rent the correct way to calculate the tenants 3*s the rent would be 3*s their Total Tenant Payment ( TTP ) in this case, if the tenants portion is $30, the tenant would be responsible for showing proof of income in $90 monthly! This is the correct way to calculate the tenants income requirement as tenants are not responsible for what the housing voucher would pay, or what the asking rent amount is. The tenant is only responsible for their portion. Please keep in mind that you can’t require the tenant to make 3*s the original asking rate, or even 1 or 2*s the original asking rate because many voucher holders are considered as low- mid income and don’t have the proof of income to show for the full asking rent amount which is why they are approved to hold a voucher. Anyone who has a voucher could be on disability, making minimum wage, or receives government assistance. This is why we don’t require voucher holders to make the original asking rent price. Vouchers will ALWAYS cover the rent, even if the tenant has lost wages, or loses their income for some reason. Section 8 housing vouchers will assure the entire rent amount is paid monthly as we are aware that things in life happen. I find that income requirements to be approved for a home is one of the biggest misunderstandings when it comes to working with housing vouchers, so yes to best answer your question to calculate income requirements please calculate 3*s the tenants portion. If your property requires 1* the rent or 2*s the rent, you would only calculate the tenants portion not what the asking rate of rent is, or not what the voucher would cover monthly. Lastly, by law this is not discriminating and a landlord can not be sued for having different requirements for tenants that hold housing vouchers because the individual holds a housing voucher, if they didn’t hold a housing voucher that would then be a different call. I hope this helps. Thank you.
- Supervisor Of A Housing Authority.
I apply that rule to S8 potential tenants, but only for what their portion of the rent will be. You won't know what their portion of the rent will be until almost the end of the process. But you can take a good, educated guess. I actually start by just asking the tenant, while I'm looking at their voucher. Like, "What is the current rent where you are and what is your portion?"
However, the tenant does need to pay the full security deposit before move-in. The security deposit I charge is the typical one month's rent. S8 does not pay for security deposits, though other charitable organizations might. But all of that is for the tenant to figure out.
I believe S8 will give more in rent if some/all utilities are included. But, yes, you can still require a S8 tenant to have the utilities put in their name and for them to be responsible for it. I personally wouldn't do it any other way. But then, all my rentals have separate meters for each address anyway.
awesome @Jennifer T. - thanks
thanks @Cara Lonsdale @Jennifer T.
can the voucher recepient pay out of pocket for rent/utilities if the voucher does not cover the entire amount?
thanks @Cara Lonsdale @Jennifer T.
can the voucher recepient pay out of pocket for rent/utilities if the voucher does not cover the entire amount?
I believe the voucher dictates what must be included, and what can be charged. If the voucher is supposed to cover rent PLUS utilities, then you can't charge the Tenant for them. So, just be REALLY clear about what you can, and cannot charge the Tenant for.
I've read you should require 3 times the income for your rental price.
Do you apply this to section 8/HCV?
Or do you submit each application and see what the government will pay you and go from there?
If their voucher covers their rent, you can still make them pay for their utilities?
On utilities, only if separately metered (where they can be required to start in their own name, effective date of lease signing). Otherwise no.
And you have to ignore their income, unfortunately. They will end up paying 30% of their "net" income (after taxes and some deductions like cost of child care and a utility allowance number based on your location, which may or may not be actual utility costs) as their portion. Sec 8 pays the rest, up to their allowed $$ for #bdrms and zip code. You can't charge anything over that 30% tenant portion. The max you can charge, you should be able to get from the local Sec 8 office. You can (and should) make them pay full security deposit, any pet fees (but probably no pet rent, unless you are under the Sec 8 rent) and do full credit and background checks (there will be debt, maybe collections, but you can screen some criminal, depending on where you are, and evictions -- again, depending on where you are).
Let's say you are charging $800. 3 times is $2400/month. If they made that, they would not get a voucher, more than likely, at least not here, but it is theoretically possible that would get a tiny voucher for some high end areas or with lots of kids. It's more likely they make maybe $10/hr and hopefully are full time. That's $1600/month gross, So at most they'd pay $480/month (more likely, perhaps $375 at that level). So, if they are a $375, their voucher is $425. Added to their gross income, that won't meet the $2400 level you look for. It's likely the situation is even worse, if they don't work full time or get SSI.
You can figure out avg utilities and make some guesses at the amount they'll need to live on and set that as a minimum, but those at the very low end can usually get other assistance that doesn't show on a 1040. I look, instead, at evictions, late payments with past landlords, if they have any utility bills outstanding, etc, rather than trying for a fixed $$ amount of income.
thanks @Karen O.
So I set the rent and each individual with a voucher will be a wait and see if the price works out with each individual?
Somewhat. You set the rent, take apps and if you approve someone with a voucher AND they pay you the security deposit (in full, I recommend) to hold it, you then wait until you get inspected (here, 2-3 weeks, I've heard some areas can be a couple of months), then schedule the lease signing (about a week here; again, longer in some areas) and on that day, provided the applicant has turned on utilities in their name (a Section 8 requirement, here, as well as mine) and has their money order ready, you sign lease and hand over keys (and sign lease and paperwork with Sec 8). Sec 8's portion starts paying at end of month following the current one (it takes them a while), but includes catch-up amounts. The tenant is responsible to pay their own on the 1st of following month and there-after. The portion they pay can change at any time (you'll get a letter in the mail), so you have to keep up with it. That also means amount S8 pays can change up or down - I've had tenants go to nearly nothing, lose job and be back at full rent paid for them - the danger at this level is that they have to keep up their utilities, too, with no income, so again, you have to keep an eye on the property, esp in winter.
There may be a question as to whether S8 will pay what you want, as well - they call other landlords with similar properties in your area and look at other units in a multi, to see if what you are setting is truly market rent (if below S8 max, you can't just charge S8 max, only "market") and some people in this position think they can badger you into a low amount, since at this point in the process, you've been inspected, approved, etc, and are often a few weeks with the unit off the market and no rent coming in yet. So, you have to be pretty sure of the rates you set.
You can guess, I suppose, why some landlords no longer want to deal with S8 -- attempting to force landlords to take it won't work, as many will just set short holding times and non-refundable holding fees that any S8 voucher holder will hopefully refuse to pay, as it isn't a short process.
I have several S8 tenants, they are pretty good, pay on time, take care of the place, etc. I've had others in the past that have had to be evicted, for various reasons, just as with other tenants; the prospect of losing a voucher isn't sufficient motivation for some to pay on time, care for the premises or not try to move in the drug dealing boyfriend or the violent baby-daddy that breaks windows throwing hammers (that one broke her windshield, too). So, you do need to screen for behavior, as well. When you get a good one, tho -- my oldest S8 lease is around 20 years, I think.
Definitely not for everyone. And you can't trust the applicant to know the rules (had one today want a 3bdrm for 7 people - S8 won't approve them except for a 4Bdrm, max 2 per room, plus children can't share with adults unless under 2, etc).
I require one times the rent for a voucher holder.
Update in 2022. I’ve seen where it looks as if Jennifer from LA has answered this question correctly. Yes, to be correct housing vouchers cover majority of the tenants rent. As tenants are not supposed to pay more than 30% of their income in bills and 40% being the most they could pay in bills after a year! So for example if a tenants income is $100 every month the tenant would pay a portion of $30 directly to their landlord ( the rent portion is also known as the Total Tenant Payment- TTP ) which goes directly to the landlord from the tenant, and the housing choice voucher would cover the remaining $70 to the landlord monthly. If a tenant is looking to rent from an apartment community, realtor, or private owner and the income requirement is 3*s the rent the correct way to calculate the tenants 3*s the rent would be 3*s their Total Tenant Payment ( TTP ) in this case, if the tenants portion is $30, the tenant would be responsible for showing proof of income in $90 monthly! This is the correct way to calculate the tenants income requirement as tenants are not responsible for what the housing voucher would pay, or what the asking rent amount is. The tenant is only responsible for their portion. Please keep in mind that you can’t require the tenant to make 3*s the original asking rate, or even 1 or 2*s the original asking rate because many voucher holders are considered as low- mid income and don’t have the proof of income to show for the full asking rent amount which is why they are approved to hold a voucher. Anyone who has a voucher could be on disability, making minimum wage, or receives government assistance. This is why we don’t require voucher holders to make the original asking rent price. Vouchers will ALWAYS cover the rent, even if the tenant has lost wages, or loses their income for some reason. Section 8 housing vouchers will assure the entire rent amount is paid monthly as we are aware that things in life happen. I find that income requirements to be approved for a home is one of the biggest misunderstandings when it comes to working with housing vouchers, so yes to best answer your question to calculate income requirements please calculate 3*s the tenants portion. If your property requires 1* the rent or 2*s the rent, you would only calculate the tenants portion not what the asking rate of rent is, or not what the voucher would cover monthly. Lastly, by law this is not discriminating and a landlord can not be sued for having different requirements for tenants that hold housing vouchers because the individual holds a housing voucher, if they didn’t hold a housing voucher that would then be a different call. I hope this helps. Thank you.
- Supervisor Of A Housing Authority.
Keep in mind that not every one who receives housing assistance is lazy, dirty, trouble, or destructive. It would be good to meet the tenant at their current residence before they are approved to see how they live. It would reassure you that you’re renting to someone who will keep your place in good condition. I am one of those people!😉
How is it legal to deny someone who has a voucher a place if they meet the requirements to move in? On what basis would the denial be if they have met the requirements and still denied because they don’t make the actual amount of someone who does make three times the rent? That is discrimination based on a prospect being on a low income program, especially when they’re rejected to let someone who makes much more money rent instead of someone who is struggling to find a place because of financial difficulties! If Hud is paying their portion, they’re going to get their money from the tenant, and if they don’t pay their rent, it’s out they go, just like anyone else! At least with the voucher, the landlord isn’t out thousands of dollars, since a voucher holder couldn’t get that far behind in rent without violating their Hud contract.
thanks @Karen O.
So I set the rent and each individual with a voucher will be a wait and see if the price works out with each individual?
Somewhat. You set the rent, take apps and if you approve someone with a voucher AND they pay you the security deposit (in full, I recommend) to hold it, you then wait until you get inspected (here, 2-3 weeks, I've heard some areas can be a couple of months), then schedule the lease signing (about a week here; again, longer in some areas) and on that day, provided the applicant has turned on utilities in their name (a Section 8 requirement, here, as well as mine) and has their money order ready, you sign lease and hand over keys (and sign lease and paperwork with Sec 8). Sec 8's portion starts paying at end of month following the current one (it takes them a while), but includes catch-up amounts. The tenant is responsible to pay their own on the 1st of following month and there-after. The portion they pay can change at any time (you'll get a letter in the mail), so you have to keep up with it. That also means amount S8 pays can change up or down - I've had tenants go to nearly nothing, lose job and be back at full rent paid for them - the danger at this level is that they have to keep up their utilities, too, with no income, so again, you have to keep an eye on the property, esp in winter.
There may be a question as to whether S8 will pay what you want, as well - they call other landlords with similar properties in your area and look at other units in a multi, to see if what you are setting is truly market rent (if below S8 max, you can't just charge S8 max, only "market") and some people in this position think they can badger you into a low amount, since at this point in the process, you've been inspected, approved, etc, and are often a few weeks with the unit off the market and no rent coming in yet. So, you have to be pretty sure of the rates you set.
You can guess, I suppose, why some landlords no longer want to deal with S8 -- attempting to force landlords to take it won't work, as many will just set short holding times and non-refundable holding fees that any S8 voucher holder will hopefully refuse to pay, as it isn't a short process.
I have several S8 tenants, they are pretty good, pay on time, take care of the place, etc. I've had others in the past that have had to be evicted, for various reasons, just as with other tenants; the prospect of losing a voucher isn't sufficient motivation for some to pay on time, care for the premises or not try to move in the drug dealing boyfriend or the violent baby-daddy that breaks windows throwing hammers (that one broke her windshield, too). So, you do need to screen for behavior, as well. When you get a good one, tho -- my oldest S8 lease is around 20 years, I think.
I'm experiencing this now was denied an apartment because of the 3 times the rent rule. I'm disabled and have a HCV here in Louisville Kentucky with LMHA is there anything in writing about this from HUD. I thought they were supposed to apply that rule against my portion of the rent TTP and do the 3 times the rent with that being that I'm not responsible for the full rent. Please advise