Becoming a Section 8 landlord: A guide

Understanding the Section 8 Housing Choice Voucher program

The Housing Act of 1937 authorized the Section 8 Housing program. The program is designed to support low-income earners, people with a disability, and aging Americans who need access to decent housing.

According to the Center for Budget and Policy Priorities, the Section 8 program helps 5.3 million American people with housing. This program connects them to places to rent through the HUD’s Section 8 Housing Choice Voucher (HCV) program, which is administered by local public housing agencies (PHAs) that receive funding from HUD to pay private landlords directly.

What is a Section 8 landlord?

For clarity, a landlord is someone who owns an investment property and rents it out to tenants. A Section 8 landlord is a property owner who rents to a particular type of tenant, such as someone who receives government assistance to help pay their rent.

The designation of a Section 8 landlord brings certain responsibilities. They must agree to maintain their properties according to HUD standards. That means they must submit their properties for initial and periodic inspections to ensure they meet safety and quality requirements, including adequate heating, functional plumbing, and structural integrity.

Section 8 landlords can screen their tenants and enforce lease terms, but they must also comply with additional program rules, such as using HUD-approved lease agreements and obtaining housing authority approval before increasing the rent.

Section 8 housing landlord requirements

There are specific Section 8 housing landlord requirements. Exact procedures vary, but here’s what you can generally expect.

Register with your local PHA

You should start by contacting the Public Housing Agency (PHA) in your area. They administer vouchers. Procedures and documents vary by area, but you may be able to complete a Section 8 landlord application online or get a Section 8 landlord packet PDF. You may also need to provide tax or banking information and proof of ownership of the rental property.

Pass a property inspection

Your property will typically need to pass the physical inspection standards being used by your area’s PHA.

Recently, HUD finalized new property inspection procedures, called the National Standards for the Physical Inspection of Real Estate, or NSPIRE. These replace the former standards, however, HUD has extended its deadline for compliance to February 1, 2027. So, during this transition period, you should ask exactly which standards your property must meet in your area.

Meet rent reasonableness rules

Under the section 8 program, you don’t get to charge any amount of rent you want. You must meet the area’s rent reasonableness requirements. You can’t charge more in rent than a similar property in your area that is not subsidized by grant funds. In real estate terms, you can’t charge more than a certain amount above fair market value; this amount must match or be lower than unassisted properties in the exact neighborhood.

Sign the lease and HAP contract

After the tenant, rent, and property are approved, the landlord and tenant enter into a standard lease agreement according to program requirements. In addition, you as landlord will enter into a Housing Assistance Program (HAP) contract. This verifies the PHA’s responsibility to make payments to you and your responsibilities.

Follow fair housing rules when screening applicants

You have the right to screen applicants who want to use vouchers. But your screening methods must comply with fair housing rules and the law. For instance, you can ask for a rental history, references, and certain other factors. There are federal, state, and local laws to consider, and you must apply them consistently across applicants.

How to become a Section 8 landlord

Learning how to manage rental properties is a big step for any investor, but working as a Section 8 landlord involves a few more steps. If you’re interested in affordable housing investing, you should develop a plan for becoming a landlord by reviewing your finances, exploring your desired rental location, and determining the types of tenants you want to serve.

Once you’ve done this legwork, contact your local Public Housing Agency (PHA) to learn about the role of a Section 8 landlord and what you’ll need to do before finding your first tenant. The local PHA can provide a detailed explanation of the expectations, as well as the specifics of their operation.

Here are the steps you’ll typically follow:

Gather your landlord documents

Be prepared. Gather all the documents your PHA registration will require. These can include proof of property ownership, taxpayer information, insurance documentation, proposed rent, and more. Document requirements can vary, so it’s smart to get your PHA’s list as soon as possible.

Contact your local PHA

You’ll need to work directly with your area’s PHA. Some allow online Section 8 applications. Others use emailed or in-person forms. It’s also important to understand how they handle things like unit listings, tenant verification, rent increases, and other specifics.

Submit the required forms

There are many forms that typically need to be submitted before a tenant can move in and rent is paid. For instance, in addition to the forms you’ll need to fill out as a landlord for your and your property’s approval, when you do find a tenant, a Request for Tenancy Approval, commonly abbreviated RTA or RFTA, will be required. Once approved, you and the tenant enter into your lease and you and the PHA execute the HAP contract.

Section 8 inspections: HQS and NSPIRE

Property inspections are a big part of Section 8 housing, and HUD is currently transitioning from the Housing Quality Standards (HSQ) to the new National Standard for the Physical Inspection of Real Estate (NSPIRE) inspections, which put particular emphasis on health, safety, and the functionality of the home.

What inspectors review

Inspectors check to ensure that conditions of a property will not negatively affect a tenant’s health or safety. They also check systems, appliances, and more. So, they’ll inspect plumbing, heating, electrical systems, structural condition, sanitation, water supply, and smoke detection. This goes for both the interior and exterior.

Initial inspections

The initial inspection of your property will take a few hours and take place when a voucher holder selects your rental and submits their request for tenancy approval. This is when your property will need to pass the extensive requirements referred to above. It’s a good idea to inspect your property before this so there are no issues that might delay the move-in.

Annual inspections

In addition to the initial inspection, you’ll need to complete follow-up inspections, according to the new NSPIRE rules. These inspections occur periodically, every 1 – 3 years.

Complaint and quality control inspections

Inspections can also be triggered any time by poor property conditions. A tenant or government official can report a problem or suspected problem, and that could result in an inspection. You must comply with this request to remain in the program.

What happens if the unit fails inspection

The ramifications for failing an inspection item vary by its severity. For instance, a life-threatening issue like gas leaks or no heat might trigger a 24-hour deadline to fix it. Other issues that are not as dangerous might mean 30-day deadlines. Left unresolved, failed inspections can lead to a canceled contract.

What is a Section 8 tenant?

Section 8 tenants must meet certain requirements and complete a thorough approval process. In addition, PHAs decide who’s eligible to pursue a rental, but landlords have the ultimate say in who they rent to. With that in mind, here’s the process for a Section 8 tenant:

Eligibility requirements

The most crucial factor in Section 8 eligibility is income. HUD defines low-income families as those earning no more than 80% of the area median income, very low-income families as those earning no more than 50%, and extremely low-income families as those earning no more than 30% of the area median income or the applicable federal poverty guideline. Generally, a household must be low-income, very low-income, or extremely low-income under HUD's income limits for the area.

Tenant application process

PHAs oversee administering vouchers to families and individuals, so they’re also in charge of screening potential tenants. In addition to income level, PHAs also look at family size, the applicant’s age, disability status, previous home displacements, and citizenship or eligible immigrant status.

The waiting list

Many people need the help of Section 8 housing. As a result, the number of applicants typically exceeds the number of vouchers. So, once the PHA approves a person or family, that person or family goes on a waiting list.

Since there is an overwhelming demand, an eligible tenant may wait years before a voucher is available. Because of this, some applicants enter voucher lotteries, which are used to determine which applicants will get a spot on the waiting list when it opens.

Voucher allocation

Legally, PHAs must distribute 75% of their vouchers to applicants who fit in the extremely low–income category. That gives people who earn 30% of their area’s median income an edge, but it also may put other households at a disadvantage.

Direct payments to landlord

Generally, Section 8 vouchers pay for roughly 70% of the tenant’s rent and utilities, although costs vary by location, and these bills are connected directly to the landlord’s bank account. The tenant then covers the remaining costs using their own income.

There’s a higher rent limit, though. A family can elect to pay extra for an apartment of their choice; however, the total tenant portion of rent cannot exceed 40% of their monthly adjusted gross income when they lease the unit.

How to rent out Section 8 housing

Typically, PHAs provide applicants with vouchers they can use to rent from landlords. Applicants can search for eligible housing once they receive their voucher, but several months may pass before they receive it.

Here’s a brief overview of the process.

1. Voucher holder finds a property

After getting their voucher, an applicant searches for a rental. When they find one, they tell the landlord that they plan to use the voucher for assistance. The landlord can then decide whether they want to consider renting to the applicant or not.

2. Landlord completes the RTA or RFTA

If the landlord decides to rent to the applicant, you both complete a Request for Tenancy Approval, often called an RTA or RFTA. The form gives the PHA information about the property, the rent, utilities, and lease terms. The landlord generally submits the required ownership and payment documentation too.

3. Landlord screens the tenant applicant

While renting to Section 8 tenants requires an extra step or two, they’re still tenants. That means landlords have the same responsibilities. So, while the PHA screens participants, landlords should go through with their regular screening process as well.

4. Local PHA reviews the rent

After completing the RFTA and gaining approval to rent from the landlord, the voucher holder returns to their PHA. The agency reviews the form to make sure everything is good to go.

5. Inspection is scheduled

Local PHAs must inspect rental housing before they let a voucher holder live there. They’ll ensure the unit meets HUD’s HQS or NSPIRE requirements before the lease can be signed.

6. The lease and HAP contract are signed

After everything’s been approved, all involved parties, including the local PHA, sign the lease. The landlord also has to sign a Housing Assistance Payments Contract (HAP), which guarantees they directly receive the Section 8 subsidy. In return, the landlord guarantees to maintain the property’s sanitation and upkeep at a reasonable rental price.

How Section 8 rent is determined

As mentioned, when you rent to a Section 8 voucher holder, it doesn’t mean you can charge whatever you want for rent. The PHA determines whether the rent is fair, using similar local listings as comparisons.

Rent reasonableness

Before approving a tenant and the amount of rent paid, the PHA must determine that the rent you, as landlord, are charging is fair under HUD’s rent reasonableness rules. They do this by comparing your rent and your rental to similar properties and rents in the area. They consider such things as location, size, type, and age, and also the amenities, maintenance, and utilities you provide.

Housing Assistance Payments to landlords

As the landlord, you’ll get paid directly from the PHA. In other words, the portion they pay will not flow through the tenant. The specific Housing Assistance Payment details and your obligations as landlord are spelled out in the HAP contract. Your tenant is responsible for paying their share directly to you as well.

Tenant rent and utilities

A voucher holder’s share of the rent is based on a few factors. A general rule is that the share cannot exceed 40% of the tenant’s adjusted monthly income but it is usually around 30%. However, this can vary. It also depends on the amount of utilities included in the rent.

Rent increases

Generally, you’re allowed to ask for a rent increase each year. The rules and timing for requesting rent adjustments will be spelled out in your HPA contract. However, you cannot simply raise the rent. The increased rent must be approved. You’ll need to apply for a rent increase in advance, usually 60 – 90 days. Then, you’ll go through the rent reasonableness review again. If approved, the voucher and tenant amounts will be recalculated.

What responsibilities does a Section 8 landlord have?

The decision of whether to become a Section 8 landlord carries both risks and potential benefits. Many Section 8 landlords enjoy a decent income from their property, making this endeavor worthwhile to them. However, working with local PHAs can create an extra challenge.

Maintain the property

As the landlord, you’ll be responsible for maintaining the rental property in a safe and livable condition. The key is to keep up on preventative maintenance so you avoid failed HQS or NSPIRE inspections.

Cooperate with PHA inspections

You’ll need to provide access for any and all inspections. If any issues are found, you’ll need to correct them in a timely manner, especially if they’re serious. Some, including safety issues, could require correction within a day.

Follow lease and HAP contract rules

As the landlord, you’ll need to comply with the standard lease agreement and your contract with the HAP. That means following rules for any rent increases and complying with the HUD tenancy addendum.

Communicate with tenants and the PHA

Like so many things in life, good communication can solve many issues before they develop. This is especially true here because there are three entities involved: you, your tenant, and the PHA. There are also many requirements that must be met and maintained. So set clear communication rules with your tenant from the start.

Do Section 8 landlord requirements vary by state?

Even though the Housing Choice Voucher program is federally funded and overseen by HUD, it’s administered by states and localities. So, some procedures and rules can differ depending on the location of your rental property.

So, for instance, requirements for California, Florida, Texas, or Michigan could all turn up slightly different rules and regulations. They all have their own websites and application processes.

Why your local PHA matters

Your local PHA establishes the administrative procedures you’ll need to follow to become a Section 8 landlord. They’ll have their own set of paperwork, inspections, payment standards, utility allowances, rent increase rules, and more. State and local landlord-tenant laws can create additional requirements as well.

What to ask before listing your unit

Before advertising your rental property to voucher holders, here are some questions you should ask your area’s PHA:

• How do I complete PHA registration?
• Is there an online version of the Section 8 landlord application?
• Can I download a Section 8 landlord packet PDF?
• Which inspection standard is currently being used: HQS or NSPIRE?
• What is the local payment standard?
• How does the PHA conduct rent reasonableness reviews?
• What documents are required with an RTA or RFTA?
• How and when can rent increases be requested?
• What local fair housing or source-of-income laws apply?

Asking these questions early in the process can prevent delays or paperwork problems.

The Pros and cons of becoming a Section 8 landlord

Like every decision, the decision of whether to become a Section 8 landlord carries both some risks and potential benefits.

Pros of becoming a Section 8 landlord

Here are some benefits you might enjoy by becoming a Section 8 landlord:

• Guaranteed payments: Rent is generally guaranteed since the PHA pays the approved voucher amount directly.
• Annual rent hikes: Landlords can request approval for a rent increase once per year.
• Low vacancy rates: The demand for Section 8 housing is usually higher than the supply, so units fill quickly. Residents also tend to stay longer.
• Partially screened tenants: The PHA already screens applicants, ensuring they meet a certain level of standards.

Cons of becoming a Section 8 landlord

Here are some drawbacks to consider before becoming a Section 8 landlord:

• Local PHA bureaucracy: Landlords must comply with their local PHA, which requires extra work and communication.
• Delays in first rental payment: In Section 8 housing, landlords don’t receive the first month’s rent until after the tenant moves in.
• Periodic inspections: The local PHA conducts periodic property inspections. Failing one could require repairs, or the landlord risks losing the subsidy.

Tips for becoming a Section 8 landlord

As you’ve likely inferred, becoming a Section 8 landlord requires some work. Thankfully, there are some things you can do to make your term as a Section 8 landlord go more smoothly.

Learn about your local PHA: The more you become familiar with the rules and regulations of your local PHA, the more you’ll know about your business environment. Keep in mind: this is essentially a business you are running.

The PHA is your go-to resource for everything from paperwork questions to payment issues, and having a good relationship likely means faster responses when you need help. Plus, PHAs often offer landlord training programs and can keep you updated on any local changes that might affect your property.

Maintain your property: Keeping your Section 8 property in good condition is crucial for many reasons: Regular maintenance prevents small issues from becoming expensive emergencies, and it helps avoid tenant complaints that could jeopardize your Section 8 contract.

Also, Section 8 properties must live up to HQS (or NSPIRE) that have been established by HUD. Failed inspections can result in payment suspensions and potential contract termination. Additionally, many local housing authorities have their own maintenance requirements that supplement federal standards.

Stay in touch with your tenants: The importance of engaging with your Section 8 tenants may sound touchy-feely, but it also makes good business sense. Regular check-ins with tenants can help you spot maintenance issues early, and understand tenants’ needs.

From HUD's perspective, maintaining good communication helps ensure you're meeting your obligations around reasonable accommodation requests and fair housing requirements. Plus, tenants who feel heard are more likely to report small problems before they become big ones, and they're generally more cooperative during inspections and other necessary Section 8 procedures.

Keep in mind that it won’t always be easy: Running a Section 8 property means accepting that sometimes, there are complications. So, while housing authorities usually pay like clockwork, there can be other issues like staff shortages, paperwork snags, or inspection delays that can create some issues.

That’s just one of the reasons smart landlords keep a healthy cash reserve to handle these hiccups and stay on top of their expenses.

Resources for Section 8 landlords

Becoming a Section 8 landlord can be complicated, but there are many organizations that can provide helpful background information, contacts, and more. Here are a few:

• USA.gov has a great deal of information, useful links, and more.
• The HUD Office of Housing can put you in touch with local offices, their blog has a great deal of engaging articles, and their site links to many essential resources.
• This HUD page can help you find your local PHA.

The bottom line: Section 8 is an important market with much to offer participating landlords

The Section 8 Home Choice Voucher Program plays an important role in providing housing opportunities for those who may not have the financial means to secure housing independently. For landlords, participating in this program can open doors to a reliable pool of qualified tenants and provide a steady rental income stream.

While the program does come with specific requirements and responsibilities, the benefits of supporting this vital housing assistance initiative, combined with the potential for consistent returns, make it a worthwhile consideration for rental property owners looking to expand their portfolios.

If you’re ready to apply for a mortgage on an investment property, you can start the application process today.