I have a couple investment homes in the suburbs of Chicago that have incredible upside potential for rent to section 8/ voucher holders. The Housing Authority of Cook County (HACC) has recently disclosed new rental pricing and want to know if anyone has obtained these rents? If so, help me do the same!
How do I get started? The HACC offices are not very responsive. Does anyone have recommendations on classes? Forums? Websites? Webinars?
Please help get these rents!
I just googled their site. They have a neighborhood by neighborhood approach to establishing fair market rents (FMRs). They are located here: http://thehacc.org/wp-content/uploads/2012/10/Paym...
Those are the 2013 numbers, which are now out of date, but should give you a ballpark of what they are today. The easiest way to get a current list of FMRs is probably just dropping by the office. If the FMRs look like they work for your properties, less 10% to account for utility allowances to the tenant, just search the site for the walkthroughs on how to attract Section 8 tenants, or feel free to PM.
Hope this helps!
Thank you. I will go to their office, that is a good idea! Funny, I just gave someone else that advice on a different post regarding a different issue. haha.
@Mark Ainley might be able to steer you in the right direction
Hey @Fermin Saucedo , everyone raves about 'The Section 8 Bible' (book). I haven't read it but it could be a great resource for you.
The Section 8 Bible books (both) are good reads.
Be aware that the FMR are not always followed by the local housing authorities. In my county here in Georgia a 3 bedroom unit has a FMR of $990 a month; our local housing authority has "capped" their Section 8 reimbursement for this size unit at $675 a month for years now; far below fair market value. Between that and inspectors who can be royal PITA's this program is often just not worth dealing with.
Thank you! That's what I'm afraid of. Ugh. I need to test the waters and attempt to obtain these new FMR rates they've just released. It's too enticing not to give it a go!
Thanks Brie, We have more experience with CHA vs CCHA but we do manage 5 or 6 CCHA's and not had any experience with the new system they are putting out there. The voucher's all of a sudden in the past week seem to be higher amounts but still skeptical of the rent to the landlord will be after the utility stipend the tenant gets off of the gross voucher value.
You might check with landlords that solicit or market to section 8 tenants as well as visiting the local housing authority offices. I am sure you will be able to get all the answers you want. You still screen tenants and pick those which you feel are the best fit for you and your properties though. Nothing says you have to accept any one particular section 8 tenant so you still will have a choice of who to rent to.
You can do credit checks, know who has a job and be able to verify their work history and other background issues such as eviction history. This has been my experience anyway. Section 8 also established FMR for different neighborhoods so that can be an indication as to where you want to own and operate rental property if your goal is to assure your monthly rents through the section 8 program.
Also section 8 frequently will not guarantee 100% of the rents and many section 8 tenants depending on their income level will still be responsible for their fair share of the rent which they are personally responsible for. As an example they may be responsible for 35% of their income. On a rent of $900/mo with an income of $1,200.00/mo. a tenant may be responsible for paying $1,200.00 x 35% = $420.00 so that would come to you from the tenant and the balance of $900.00 - $420.00 = $480.00/mo from the section 8 program.
Another thing with section 8 is that do not count on getting your rent on the 1st of the month every month. In fact your payments for section 8 may even lag one to two months if not days or weeks in a good situation. You will get your rent for sure but there is no absolute day that you will get it every month or right on time. When you visit the housing authority offices in your area ask about this or any other issue you can think of. As a landlord with section 8 you will be required to sign a contract. Be sure you understand all the details of the terms.
Get the 2 Section 8 bible books they are great!
I am new to cook county voucher program. I am posting this message to get some information on how the program works from a lot of seasoned BP folks here.
I have a 3BR / 1.5 Bath Rental Unit in Cook County targeted for a Section 8 Tenant. Based on recently published 2015 Fair Market Rent Standards in that zip code, rent for a 3 BR SFR unit is $1355.00. What I am not sure is whether that includes utilities as well. There is a separate utility allowance standards as well for different size units.
What I am told by a friend of mine, is that rent includes utilities. Now based on the utility allowance sheet the utilities for 3 BR SFR is about $250.00. Since I indicated in the HACC application that all utilities to be paid by tenant they would deduct the utilities from the total rent. So they will approve about $1100.00 for rent alone for this unit which is short fall of $500.00 from what ($1600.00 pm) is in the lease document that I submitted along with HACC Application.
Out of this based on income of the tenant a portion will be paid by the tenant - typcally about 30% of income. So if tenant's income is say $1500.00 per month about $450.00 will be the responsibility of the tenant out of approved rent of $1100.00. That means what voucher program (HCV) would pay landlord is the difference, i,e $650.00 pm.
Now that means tenant will have to pay this additional $500.00 over and above what he / she will be paying per voucher program. And this additional payment cannot be part of any documentation and the lease that is submitted to the HCV program. If the tenant decides not to pay that additional $500.00 there is no legal recourse whatsoever.
Is that how it would work if rent indicated in the lease is more than what voucher program will approve? Isn't the tenant bound by the agreed upon rent amount as indicated in the signed lease document? Or is there any other document like lease addendum that I will need to have him/her sign outside of the lease agreement? Is that even legal?
Any help would be greatly appreciated.
After the home is rented and the home is inspected by HACC (Sec 8) there is a negotiation process where they notify you of the rent they are willing to pay. Regardless of the percentage splits.
From there it is the new "negotiated" price that will supersede the original amount. (I put negotiation in quotes because it's really not a negotiation you can't really counter.) It's your choice to accept it or decline the dollar amount offered by the program. From there, HACC requires you to update the lease to the new amount.
Accepting anything over voucher is illegal and could put their voucher at risk and your landlord status at risk as well.
Any tenant that says "I've gotten permission to pay above voucher" I ask for it in writing from the housing authority. CYB. I haven't seen one yet. Hope this helps!
Yes, Eddie. You are correct. Thank you
@Anant B. - I meant to tag you in my last post.
Free eBook from BiggerPockets!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!