Section 8 housing is an excellent initiative for both landlords and tenants. It helps secure an ongoing income for property owners while providing those less fortunate with decent housing.
Landlords can sign up for the Section 8 program via their local housing authority. They will inspect your unit to ensure it meets their minimum standards.
It might seem like you need to charge very low rent to qualify as a housing provider, but that isn't the case. Read on to explore the affordable housing guidelines for reasonable rent in Cleveland, Ohio.
What Is Section 8 Housing?
'The Section 8 housing program is a federal program that aims to reduce homelessness across the USA. It is supplemented at the state and local level by many other housing assistance programs.
The Section 8 eligibility criteria for tenants are purely financial. They must earn a wage equal to or below the average for the area.
Tenants must apply in writing online and join a waiting list until they find a placement.
Section 8: Rent Reasonability Factors
The HUD bases its voucher program on Fair Market Rent calculations for major metropolitan areas and non-metropolitan counties. They define fair market rents as equal to the 40th percentile of gross rents in a community.
This equals the amount of rent common to 40% of housing units in the area. Their calculations are based on standard quality units and comprise a sample of at least 100 1-, 2-, and 3-bedroom houses built over two years prior.
The housing authority gives Section 8 tenants vouchers valued at 90% to 110% of the Fair Market Rent for an area. The percentage paid for each area is called the 'payment standard', calculated according to the average earnings for that location.
You can find a list of the payment standards for various zip codes on the CMHA website. The landlord receives rent equal to the payment standard plus 30% of the tenant's income.
Rent Reasonableness
As part of the Section 8 rent process, the HUD calculates whether applicants can afford the housing they've applied for based on their net income and other housing expenses like utility costs.
This means landlords might need to adjust their rent slightly to accommodate these tenants.
To calculate whether your rent aligns with Fair Market Rents, you should perform a rental analysis for your neighborhood. A real estate agent or property manager can assist you with this.
Benefits of Being a Section 8 Landlord
The biggest and most obvious benefit of being a Section 8 landlord is receiving reliable income through the voucher program.
Section 8 tenants must take good care of the property and pay their rent on time. If they don't, the HUD will cancel their access to housing vouchers. Due to ongoing housing shortages, these tenants are also highly likely to renew their leases.
Despite this, you should still perform all the usual background checks for these tenants according to fair housing standards.
Get Help Navigating Section 8 Housing
The Section 8 housing program offers several benefits for landlords in the form of high occupancy and guaranteed rent. In return, the landlord must maintain their property in an acceptable condition and charge Fair Market Rents.
PMI CLeAgent can help you navigate the complexities and paperwork involved in becoming a Section 8 landlord in Cleveland. Our services include everything you need to qualify as a housing provider and keep your tenants in place.
Explore your options with us today.
