What is Section 8 Housing?

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The Federal Section 8 program, also known as the Housing Choice Voucher Program, assists low-income families, the elderly, and disabled individuals in renting housing from the private sector based on their income and family size. Approximately 4.5 million people in the US, including nearly 2 million children, reside in Section 8 housing. This article will discuss Section 8 housing, eligibility requirements, and the application process.

Section 8 housing is a federal initiative, administered by local Public Housing Agencies (PHAs) that establish eligibility criteria. To qualify, an individual’s gross annual income should not exceed 50% of the median income for that area. Additionally, 30% of vouchers are allocated to families with a gross income below 30% of the median income. Research shows that 80% of households under Section 8 housing earn less than $20,000 per year.

Eligible individuals contribute 30% of their monthly income towards rent and utilities, with the PHAs covering the remaining amount. Applicants can apply for the Section 8 Housing Choice Voucher (HCV) program through their local PHA. Once approved, individuals or families receive vouchers to rent private housing units. Only properties accepting Section 8 vouchers and meeting specific criteria can be rented. Applicants typically have 60 to 120 days to find a home, with extensions available under certain circumstances.

Landlords, after screening and accepting the applicant, receive a portion of the rent directly from the PHA. However, obtaining Section 8 housing can be challenging due to paperwork requirements and waiting lists. Not all landlords accept Section 8 tenants, as it is not mandated by law, and rising rental rates have made many landlords reluctant to participate.

Section 8 housing comes in two forms: Tenant-based and Project-based. The Tenant-based program, also known as the Section 8 Housing Choice Voucher program, allows applicants to use their voucher anywhere in the United States as long as the property accepts these vouchers and complies with Housing Quality Standards (HQS) established by the Department of Housing and Urban Development.

Project-based vouchers, on the other hand, are tied to specific properties. Private property owners receive these vouchers from the PHA to reserve units for Section 8 tenants. Unlike tenant-based vouchers, which can be used anywhere in the United States, project-based vouchers remain with the property and are utilized by the next tenant once the previous one moves out.

To qualify for the Section 8 housing program, applicants must meet specific criteria set by their local Public Housing Authority (PHA). These criteria include considerations about income, family size, citizenship status, eviction, and criminal history.

Income eligibility requires applicants to earn less than 50% of their area’s median income at the time of application. This includes all sources of income like overtime, child support, retirement funds, welfare, and disability benefits. If income increases during the subsidy process, support can still be received as long as it remains below 80% of the area’s median income. Income eligibility is reviewed annually by the local PHA.

Family size is also a factor. The local PHA considers the number of people living in the household, especially if there are minor children, disabled individuals, or persons over 62 years old. Even individuals can apply, and their personal and living circumstances will be evaluated.

To avail the Section 8 housing voucher, applicants must be either U.S citizens or immigrants meeting certain criteria. Proof of citizenship or legal immigration status is required, and each family member must comply with all citizenship requirements. Undocumented immigrants cannot apply for housing assistance.

Applicants with a history of eviction from public housing or any Section 8 program due to serious lease violations, like drug-related criminal activity, will be ineligible for the Section 8 housing program for at least three years from the eviction date. Any prior evictions, especially from public housing authorities, require checking specific requirements with the local PHA.

A criminal background check is mandatory for all applicants. Having a criminal record doesn’t automatically disqualify an applicant, but it’s recommended to check with the local PHA about their specific criteria and how it may affect eligibility.

Participating in the Section 8 program offers benefits for landlords like guaranteed rental income, income reduction protection, reduced vacancy rates, potential for long-term tenancy, property maintenance, and access to support services.

Section 8 tenants can also consider buying a house through the Section 8 Housing Choice Voucher Homeownership program, available since 2000. However, this option isn’t widely used due to landlords’ ability to rent at above-market rates and their reluctance to sell to Section 8 Homeownership program participants.

To participate in the homeownership program, additional criteria must be met, such as being a first-time homeowner, having full-time employment of at least one household member, specific savings account balance, and completion of a pre-assistance homeownership course and a housing counseling program. Assistance is limited to 15 years, even if the mortgage period is longer.

Additionally, the HUD-Veterans Affairs Supportive Housing (HUD-VASH) program provides rental assistance for homeless veterans, supplemented by clinical services from the Department of Veterans Affairs. For more information and FAQs about the program and affordable housing opportunities, please visit the program’s official website.

Empowering Low-Income Families: Section 8 Housing and Real Estate Opportunities

Section 8 housing is advantageous as it doesn’t solely rely on public housing. It offers low-income families the chance to access clean and secure accommodation in the private rental sector. Additionally, this program allows many qualifying families to participate in the rent-to-own scheme, helping them become homeowners. 

At Foothold, our goal is to make real estate accessible to people of all backgrounds and income levels. Our platform allows you to fractionally invest in vacation rentals starting with just $200, kickstarting your journey towards building a portfolio and earning rental income. Check out our available property listings here.

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