Average time it takes for HUD to pay their portion of Section 8

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Average time it takes for HUD to pay their portion of Section 8

Irene Navasca
Rental Property Investor 路 San Francisco, CA 路 Member since 2019 路 24 posts 路 5 votes

Hi everyone,

I recently purchased my first investment property in South Bend, Indiana with a Section 8 tenant. I hired a property management team to handle everything since it's out of state. It has been two months and I have yet to receive my rent and when I followed up with the property manager, they said it's because they are waiting to receive the Section 8 portion of the rent. How long does this process take? And is there anything I can do to expedite that for them (e.g., contact HUD, put more pressure, etc.)?

Thanks!

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Andrew B.
Rockaway, NJ 路 Member since 2016 路 2k+ posts 路 2k+ votes
6y
I have no experience with Section 8, but from what I hear it always takes extra time to get your first payment started, but once you're setup for payments, you get them like clockwork.
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  • Steven Virgil
    Member since 2019 路 13 posts 路 6 votes
    6y

    I had this same issue in South Bend. It took 3-4 months to start receiving Section 8 rent for one of my units. My PM said things were backed up due to a recent FBI raid at the South Bend HUD office.

    0Reply
  • Rod HanksBusiness Member
    Insurance Agent 路 Dallas, TX 路 Member since 2013 路 743 posts 路 462 votes
    6y

    @Irene Navasca

    Sometimes it can take 2 months if they are backed up. In our area there is one that I normally don鈥檛 deal because of customer service issues but the others I do. So it depends on which housing authority administers the program.

    Rod Hanks Insurance4.9155 Reviews
    WebsiteView Page
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  • John UnderwoodPro Member
    Investor 路 Greer, SC 路 Member since 2014 路 13k+ posts 路 17k+ votes
    6y

    I had mine started in 30 days. They paid 2 months on the second month.

    Now I get a direct deposit on the 5th like clock work.

    2Reply
  • Brittany R.
    Investor 路 NY 路 Member since 2020 路 57 posts 路 44 votes
    6y

    Mine just continued...I purchased the property at the beginning on May 2019 and by the first week of June I had my first payment from them. I contacted them the day after I closed on the property and the Section 8 employee asked for my email, sent me the forms to fill out, I emailed them back. She confirmed that she received them and that was that.

    I have heard it is normal to expect it to take 2months though.

    Also, keep in mind in the future when you want to increase the rent for a new lease, you have to inform at least 60 days in advance...

    I just emailed my Section 8 supervisor what I plan on increasing it to in June 2020 (over 60 days in advance). So, she is prepared for it and there won鈥檛 be a delay in my payments(with the increase if they鈥檙e paying for it, not the tenant) once the new lease begins.

    @John Underwood- I wish that I could get direct deposits, they don鈥檛 offer it where I invest. 馃ズ

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  • Patti RobertsonBusiness Member
    Property Manager 路 Virginia Beach, VA 路 Member since 2016 路 2k+ posts 路 2k+ votes
    6y

    In our area they pay in the 1st and 15th.  Generally in the second month we get the money for the first two months.  Occasionally it takes longer, if the SEC 8 case worker never got our lease, or if they are on vacation, or who knows what.  Some caseworkers are more on the ball than others.  

    757-472-2547
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  • Michael Noto
    Real Estate Agent 路 Southington, CT 路 Member since 2008 路 5k+ posts 路 3k+ votes
    6y

    Wow. Surprised to hear these stories about Section 8. Here in CT there are a lot of downsides to renting to section 8 tenants but getting paid isn鈥檛 one of them. By the 5th like clockwork, even on the first month. 

    We always require tenants to be paid in full (deposit and first months rent) before we give keys. If you tried to do that with Section 8 would that get you your money quicker or is it just locallly accepted that onboarding with Section 8 takes multiple months?

    0Reply
  • Andrew B.
    Rockaway, NJ 路 Member since 2016 路 2k+ posts 路 2k+ votes
    6y
    I have no experience with Section 8, but from what I hear it always takes extra time to get your first payment started, but once you're setup for payments, you get them like clockwork.
    2Reply
  • Rod HanksBusiness Member
    Insurance Agent 路 Dallas, TX 路 Member since 2013 路 743 posts 路 462 votes
    6y

    @Michael Noto

    They barely can afford the deposit so it鈥檚 tough to find a Sec 8 tenant able to pay deposit and first months rent. 2 months is just the standard for getting setup on the program and getting the first check.

    Rod Hanks Insurance4.9155 Reviews
    WebsiteView Page
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  • E.S. Burrell
    Rental Property Investor 路 MI 路 Member since 2019 路 192 posts 路 205 votes
    6y

    I don鈥檛 know anything about Section 8 but it sounds scary.

    0Reply
  • Irene Navasca
    OP
    Rental Property Investor 路 San Francisco, CA 路 Member since 2019 路 24 posts 路 5 votes
    6y

    @Steven Virgil

    Thanks for the feedback! I guess I鈥檒l just set my expectations to a 4-month grace period before I start following up.

    0Reply
  • Irene Navasca
    OP
    Rental Property Investor 路 San Francisco, CA 路 Member since 2019 路 24 posts 路 5 votes
    6y

    @Rod Hanks

    Thank you! Def setting my expectations a little lower, and will probably opt for a non-Section 8 tenant for my next investment. Not that, this tenant is bad but it would be nice to get my money as soon as it鈥檚 due.

    0Reply
  • Irene Navasca
    OP
    Rental Property Investor 路 San Francisco, CA 路 Member since 2019 路 24 posts 路 5 votes
    6y

    @John Underwood

    Thank you! Are you managing your property yourself or are you using a PM?

    0Reply
  • Irene Navasca
    OP
    Rental Property Investor 路 San Francisco, CA 路 Member since 2019 路 24 posts 路 5 votes
    6y

    @Brittany R.

    Thanks for the feedback Brittany! If you don鈥檛 mind me asking, which market is your Section 8 property in?

    0Reply
  • Irene Navasca
    OP
    Rental Property Investor 路 San Francisco, CA 路 Member since 2019 路 24 posts 路 5 votes
    6y

    @Patti Robertson

    Thanks, Patti. I hope my case worker is on top of it. I鈥檒l start to make more calls/follow up if I haven鈥檛 recevid anything by month 4.

    1Reply
  • Irene Navasca
    OP
    Rental Property Investor 路 San Francisco, CA 路 Member since 2019 路 24 posts 路 5 votes
    6y

    @Michael Notow

    Thanks, Michael.

    I purchased the property with the Section 8 tenant already renting who is long term and has been good about their portion of the rent so I鈥檓 not too worried, otherwise I鈥檇 be on the same page of not giving up the keys without my rent money first.

    0Reply
  • Irene Navasca
    OP
    Rental Property Investor 路 San Francisco, CA 路 Member since 2019 路 24 posts 路 5 votes
    6y

    @Andrew B.

    Thanks Andrew! I hope first few payments are the only hurdle....

    0Reply
  • Brittany R.
    Investor 路 NY 路 Member since 2020 路 57 posts 路 44 votes
    6y

    @Irene Navasca NY

    0Reply
  • Irene Navasca
    OP
    Rental Property Investor 路 San Francisco, CA 路 Member since 2019 路 24 posts 路 5 votes
    6y

    @E.S. Burrell

    I鈥檓 definitely glad I have a PM dealing with this.

    0Reply
  • Steven Virgil
    Member since 2019 路 13 posts 路 6 votes
    6y
    Once the payments start it鈥檚 smooth sailing from there. I have a fourplex with a long term Sec 8 tenant that was in place before I purchased it and I haven鈥檛 had any issues. 

    Originally posted by @Irene Navasca:

    @Andrew B.

    Thanks Andrew! I hope first few payments are the only hurdle....

    0Reply
  • Scott Mac
    Austin, TX 路 Member since 2019 路 5k+ posts 路 5k+ votes
    6y
    Originally posted by @Steven Virgil:

    I had this same issue in South Bend. It took 3-4 months to start receiving Section 8 rent for one of my units. My PM said things were backed up due to a recent FBI raid at the South Bend HUD office.

     Maybe call and call and call until you get someone to help you.

    I assume you are being serviced out of the South Bend Office.

    Here's a background on what's going on: https://www.southbendtribune.com/news/local/south-bend-housing-authority-fired-director-after-fbi-noted-serious/article_b5544e4b-9d4f-5c86-9108-245e26a43cf8.html

    Good Luck!

    0Reply
  • John UnderwoodPro Member
    Investor 路 Greer, SC 路 Member since 2014 路 13k+ posts 路 17k+ votes
    6y
    Originally posted by @Irene Navasca:

    @John Underwood

    Thank you! Are you managing your property yourself or are you using a PM?

     I self manage about 20 properties including a VRBO on the lake.

    Once you have systems in place, a HVAC company and handyman you can depend on, it takes little time to manage.

    0Reply
  • John UnderwoodPro Member
    Investor 路 Greer, SC 路 Member since 2014 路 13k+ posts 路 17k+ votes
    6y

    While watching the news about the Corona virus, I'm thinking the section 8 properties have guaranteed rent coming in from the government.

    Most of my other properties have hourly employees that will be financially  hurt if told to stay home. Which means they won't be able to pay rent.

    0Reply
  • Bob Lett
    Rockford, MI 路 Member since 2018 路 97 posts 路 26 votes
    6y

    @John Underwood interesting viewpoint as there are Ebs and flows in the market and that鈥檚 why capx and having reserves is important for situations like this.

    Just curious, what do you do if the tenant doesn鈥檛 pay their portion of section 8?

    0Reply
  • John UnderwoodPro Member
    Investor 路 Greer, SC 路 Member since 2014 路 13k+ posts 路 17k+ votes
    6y
    Originally posted by @Bob Lett:

    @John Underwood interesting viewpoint as there are Ebs and flows in the market and that鈥檚 why capx and having reserves is important for situations like this.

    If it were to happen I would have a discussion with the tenant how they would lose their government assistance if they don't pay their portion of the rent.

    Also there are people on the section 8 waiting list so I would next file an eviction. That usually straightens up most people.

    If I need to I would through with the eviction.

    Just curious, what do you do if the tenant doesn鈥檛 pay their portion of section 8?

    0Reply
  • Bob Prisco
    Specialist 路 Cleveland, OH 路 Member since 2018 路 1k+ posts 路 666 votes
    6y

    @Irene Navasca Typically the 2nd month after move in , you get the 1st and that month,

    0Reply
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