If you are a landlord or property manager, it often makes sense to actively seek out Section 8 renters. Under a Section 8 arrangement, HUD pays the portion of a Section 8 tenant's rent that exceeds 30 to 40 percent of the tenant's household income. This translates to a federal guarantee on a significant portion of the rent attached to each unit you fill with a Section 8 renter. You cannot discriminate, however, against somebody simply because he receives rental assistance.
Each year, HUD sets fair market rents for counties and metropolitan areas across the nation. As a property owner or manager, you have the right to charge whatever rent you like for your dwelling. While federal law prohibits you from charging more rent to Section 8 tenants than you would unsubsidized renters, you can charge more than HUD's fair market statistics. Bear in mind, however, that HUD does not allow Section 8 families to spend more than 40 percent of their household incomes on rent and utilities.
You can charge Section 8 tenants a security deposit. Like with rent, HUD prohibits you from charging a Section 8 recipient a larger security deposit than a traditional renter. Federal regulations permit you to withhold all or part of a Section 8 tenant's security deposit upon move-out to compensate for unpaid rent or other lease violations, including property damage. You must follow applicable rental laws and provide the tenant with an itemized list of security deposit deductions.
Fees and Amenities
In addition to security deposits, you cannot overcharge other fees on the basis of a Section 8 tenancy. For example, if you charge unsubsidized tenants $100 a month for storage or a parking spot, you cannot charge Section 8 voucher holders $150 a month for the identical amenities. You can require Section 8 tenants to pay their own utilities, however, you cannot include their electric, gas or other utilities on a meter shared by other tenants or portions of your property.
In terms of rent, ask the housing agency that administers Section 8 benefits in your area about fair market rents. The following is a rough sketch of how HUD calculates Section 8 rent payments: As of 2011, HUD sets the fair market rent for a studio apartment in the Topeka, Kansas, metropolitan area at $500. If a Section 8 tenant's monthly income is $800, she would have to pay 30 percent of her income -- $240 -- for a studio for which you charge $500 to rent. HUD covers the remaining $360. HUD makes the tenant pay any amount over its fair market rent. If you charge $600 for the studio, for example, the tenant's total payment would increase to $340, which represents 42.5 percent of his monthly income. HUD would not allow the tenant to rent this unit from you.
In terms of security deposits and other fees, follow local laws. In California, for instance, the Department of Consumer Affairs points out that landlords cannot charge more than two times the rent for a security deposit on an unfurnished unit. The state caps application fees at $42.09, as of 2009. You can hold Section 8 renters to these same standards as long as they also apply to unsubsidized applicants.
As a writer since 2002, Rocco Pendola has published numerous academic and popular articles in addition to working as a freelance grant writer and researcher. His work has appeared on SFGate and Planetizen and in the journals "Environment & Behavior" and "Health and Place." Pendola has a Bachelor of Arts in urban studies from San Francisco State University.