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                                      Table of Contents

    Chapter 1      What Is Section 8 ……………………………………

     History                  of the Program …..…………………………

     Goal                  of Section 8 ……………………………………

     Regulatory                     Body ……………………………………



    Chapter 2      Tenant Requirements ……..…………………………

     Property                   Owner Requirements ...................................



    Chapter 3      Payment Standards ......................................................

     Applicant’s                     Subsidy ....................................................

     Rent                 Calculation .........................................................



    Chapter 4      Property Selection ......................................................



    Chapter 5      Tenant Found ..............................................................

     Subm                  itting For Tenancy and Unit Approval ..............



    Chapter 6      Inspection Process ......................................................



    Chapter 7      Lease and Contract Signing .........................................



    Chapter 8      Evictions ......................................................................

                                                                                                      1 
 
Chapter 1



The Section 8 Housing Choice Voucher Program is a federally funded program designed to
provide housing to low income families. In order to better understand what the program is, we
will first need to address the history of the housing program. In the paragraphs to follow I will
discuss the program from its inception, through it many changes to today’s current form.



1937 -         This marked the beginning of federally assisted housing in the United States.

               The US Housing Act was formed based on the US Constitution under Article 1,

               Section 8, which states – to provide for the general welfare. The Housing Act

               was part of President Roosevelt’s depression era legislation aimed at providing

               jobs to the submerged middle class. Federal funds were used to construct the

               housing units, and once completed managed and maintained by local public

       housi        ng agencies.



1961 -         The first change to the program did not occur until now when Congress

               amended the US Housing Act, thus creating the Section 23 Leased Housing

               Program. This is the predecessor to our modern day program. Major changes

               that came along with the new program was the first use of privately owned

               properties. Although, the properties were privately owned the local housing

               agencies continued to manage and maintain the units. The local housing agencies

               signed a lease with the private owner, and subleased to the Section 23 tenant.

               Another change to the program occurring at this time was the implementation of

       tenant        rent contributions.

                                                                                                    2 
 
1974 -         At this point in history the Section 23 program was amended to create

               the Section 8 Rental Assistance Program. A lot of changes came along with this

               new program. The first being the local housing agencies would no longer manage

               or maintain the privately owned units. The subleasing that occurred with the

               Section 23 program was also ended, and the tenants would sign directly with the

         propert      y owner. Qualified applicants were now permitted to go out into the open

               housing market to find housing. Due to studies performed by the federal

               government showing that substandard housing was no longer a problem, but the

               high percentage of income being spent on housing. Tenants on the program were

               now not permitted to pay more than approximately 30% of their adjusted gross

               income on housing.



1999 -         This was the inception of the program we currently use today, the Section 8

               Housing Choice Voucher Program. The combination of the Rental Certificate

               and Rental Voucher programs created this Housing Choice Voucher Program.

               The local housing agencies were to become the most hands off they had ever

               been prompting clear tenant and landlord guidelines to be defined.



The rules and regulations for the Section 8 Housing Choice Voucher Program are determined
by the U.S. Department of Housing and Urban Development (HUD).



For the Section 8 Housing Choice Voucher Program to function the local public housing
agencies must be able to contract with private owners who have decent, safe, and sanitary rental
properties. Most must municipalities have a two month to a year long waiting list due to the
shortage of eligible properties and willing property owners.
                                                                                                 3 
 
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Chapter 2



In this chapter, we are going to first discuss what makes a tenant applicant eligible for the
Section 8 Housing Choice Voucher Program. The first of the criteria we are going to look at is
the gross annual income. This eligibility factor is separated into two groups: Extremely Low,
which is 30% of the median income, and Very Low, which is 50% of the median income in a
set locality. The creation of two groups is mandated by HUD. In accordance with HUD’s
Rules and Regulations that govern the Section 8 program, not less than 75% of families
admitted during the fiscal year from the waiting list shall be extremely low-income families.
Below you see a chart showing the income eligibility levels in Dauphin County, PA.


       $60,000
       $40,000
       $20,000
                                                                             30% Income
            $0
                                                                             50% Income




The next determining factor is also represented on this chart, and that is the number of persons
in the family. The number of persons in a family is not closed to mother, father, and children.
It can include a non-relative that requires assistance, an elderly grandparent that needs
assistance, or even a grandparent that does not need assistance, but is part of the family unit.

The last eligibility factor we are going to look at is the applicant must be a United States citizen,
or a non-citizen who has eligible immigration status.

Items that immediately make an applicant ineligible to receive a voucher are outstanding
judgments for unpaid rent. If they have drug related or violent criminal charges within the last
five years they are not eligible. If the applicant has been evicted while on the voucher program,
                                                                                                    4 
 
or performed fraud against the PHA (Public Housing Agency) these would also make the
applicant ineligible.

Now, I would like to look at what makes a property owner eligible or ineligible for the program.

First and foremost, the property must meet HUD guidelines regarding the property condition
inspection that will be performed either before a tenant is found, or in most municipalities after
a tenant is found. This inspection process will be discussed in a later chapter.

The property owner must have paid current all property taxes to include municipal, county, and
school. Any utility that is municipal must all be paid current.

Just as in the case of the tenant, the property owner may not have been convicted in last five
years of criminal drug charges.

Lastly, if you have performed fraud against the PHA, or violated a prior Housing Assistance
Program Contract you are not eligible.

The property portion of eligibility is simply summed up to you must a have a safe and sanitary
property that is in good tax and utility payment status.




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                                                                                                     5 
 
Chapter 3



Why implement the Section 8 Housing Choice Voucher Program into your buy and hold real
estate investing strategy?

There are a few reasons that top the list, and guaranteed rental payments, premium rental
payments, and units kept typically in better condition are just a few There will be no more
chasing your rent money each and every month because it will come to you by way of a United
States government check.

As far as premium rental payments go we will discuss that later in this chapter. In regard to
units being kept in better condition than a private tenant this I feel is due to the repercussions
that come with the Section 8 tenant. If a private tenant damages your property they can simply
leave your property, and rent another property never noting you as a previous landlord. What
are the repercussions from that tenant, none. With a Section 8 tenant if they cause damage, or
are evicted from your property and you notify the PHA they will lose their voucher eligibility
for five years. So, if this individual is in need of housing, and they do not obey your lease and
respect your property they have no means of housing for five years. In my eyes this a pretty
large deterrent.

Lastly, before I move on to the explanations of the above, I would like to mention the low
turnover rate associated with Section 8 tenants. At this point there is no deadline on how long a
tenant may remain on the program. If you ask property owners that are currently using this
program their average tenant has been in their property for three to four years.

I will end the reasons why to implement this strategy with stating that the average market time
of a Section 8 eligible property is four to six weeks including the property inspection process.
As I stated earlier, 90% of all PHA Section 8 programs across the United States have waiting
lists, or closed to new applicants. A sample of this is in Central Pennsylvania where housing
agency case workers are pulling 250-400 applications every month to review for eligibility,
these will become new tenants looking for housing. One Central PA city opened its application
process for one day and received more than 500 applications that day alone.




                                                                                                     6 
 
What I will now explain is how we will recognize premium and guaranteed rent, while
explaining the exact calculations the PHA will be using.



In the chart below you can see the difference between private tenant rental payments and a
Section 8 tenant guaranteed rental payment in the Harrisburg, PA area.




    $1,000.00
      $800.00
      $600.00
      $400.00
      $200.00                                                     Avg. Market Rent
        $0.00
                                                                  Avg. Section 8 Rent




         (These rental rates reflect the property owner paying water, sewer, and trash.)



The first item I will show you how to calculate is the subsidy an applicant receives from the
PHA. The subsidy is the amount of assistance the applicant receives on a monthly basis. The
maximum housing assistance that eligible families can receive under the voucher program is the
difference between 30% of the net household income and the current payment standard. Their
monthly housing expense may not exceed 40% of the net household income, this regulation was
put in place in 1974, which we discussed earlier.



Let’s begin to calculate an applicant’s subsidy, and see how it works. I mentioned in the
previous paragraph that we must use the current payment standard. The current payment
standards are fair market rents as determined by HUD. The payment standards vary from one
locality to another.


                                                                                             7 
 
The chart below reflects the payment standards for Harrisburg, PA as on January 1, 2009.


                                           FMR
     $1,400                                                           $1,206
     $1,200                                    $1,012 $1,049
     $1,000                            $802
       $800       $558       $638
       $600
       $400
       $200                                                                       FMR
         $0




Now that we have the payment standards for our locality, which are available at your local
housing authority we will need to determine the next factor of the subsidy. To do this we must
calculate the applicant’s adjusted monthly income. The adjusted monthly income is derived
from the applicant’s monthly income less applicable deductions. Applicable deductions are
dependents, health care, etc... For example purposes we will be assuming the applicant is
eligible for a three bedroom, and has an adjusted monthly income of $500, which is average for
an applicant qualifying as an extremely low income family.



First calculation is determining 30% of the adjusted monthly income        $150.00/mo.

We now use our payment standard chart for a three bedroom                  $1,012.00/mo.

                                                                                             8 
 
The subsidy is a simple subtraction calculation. Subtract the 30% of the adjusted monthly
income for the payment standard. In this case the applicant would be eligible for $862.00/mo.

Payment Standard =         $1,012

Adjusted Monthly Income =        $150

Subsidy =    $1,012 - $150 =     $862



The next item is how the PHA will calculate if your property will fit this applicant’s
requirements. The first item the PHA will look at when determining this is the monthly utility
cost. Each locality has a document that specifies what utility cost will be used in this
calculation. This chart assigns cost based on many factors. What type of heat system – gas, oil,
coal, or electric. Type of property – detached, attached, or semi-detached. Number of stories,
interior unit if it is attached, and many more property characteristics.

For this example, we will be using a property that is a semi-detached 3 bedroom unit with
natural gas heat, cooking, and hot water. Using the utility chart for Harrisburg, PA below we
will calculate the tenants monthly utility cost.



Heating               $107.00/month

Cooking               $13.00/m                          onth

Electric              $43.00/m                          onth

Water Heat            $34.00/m                          onth

Water           $40.00/m                                onth

Sewer          $25.00/m                          onth

Trash Collection                              $18.00/month

Total           $280.00/month


At this point in the calculation we have determined all the factors we need to input to find if this
property will fit for this applicant.
                                                                                                   9 
 
The property rent and the utilities are totaled to find the applicant’s total monthly housing
expense to make sure we do not exceed the 40% cap.

For this example the owner of this property is attempting to rent his 3 bedroom 1 bath semi-
detached single family home for $850/month with the tenant paying all utilities.



Rental Payment              $850.00/month



Utilities (which we previously calculated)     $280.00/month



Total Monthly Expense              $1130.00/             month



Subtract the applicant’s subsidy       $862.00/month



Tenants Total Monthly Housing Expense          $268.00/month



30-40% of applicant’s adjusted income          ($150 - $200/month)



The projected tenant expense would exceed the 40% of the adjusted gross income, thus
disqualifying this payment arrangement. This property can easily qualify if the property owner
includes water, sewer, and trash in the monthly rental payment of $850. The total for water,
sewer, and trash using the utility cost chart is $83/month. This would reduce the $268/month
total monthly housing expense to $185/month now qualifying the property at these terms.



As stated in the beginning of this chapter I was going to show you how to recognize not only
premium, but guaranteed rental payments. These are two great attributes any buy and hold
investor looking to build true wealth could ask for.



                                                                                                10 
 
The property owner of the example property will realize not only the premium rent I stated they
would, but in this example it will be 100% guaranteed government payment each and every
month.

The average 3 bedroom 1 bath semi-detached single family home in Harrisburg, PA average
monthly rent is $750 including water, sewer, and trash. I have just showed you how this owner
will be receiving $850/month for the exact same property. This is an additional $100/month the
property owner would be leaving on the table not using the Section 8 Housing Choice Voucher
program. If the property owner is using an accelerated principle pay-down program that
additional $100/month alone can take a 30 year mortgage to 20 years.

Better than the premium rent is that this rent payment will be a guaranteed rental payment. The
$850/month this property owner is charging the applicant is less than the $862/month subsidy
they are approved for, so the $850 each and every month will be delivered via United States
government check, or even better direct deposit. The additional $12/month, or the difference
between the $850 the owner is charging and the $862 subsidy is mailed to the tenant each
month as a utility supplement.

With the guaranteed rental payment benefit I just explained the headaches involved with
chasing rental payments were eliminated. I have now showed you how to eliminate this
headache, and get paid additional rent to do so.

Although there are no HUD ceilings on the rents charged in the Section 8 Housing Choice
Voucher Program, rents must still be reasonable and comparable to those charged for similar
unassisted units. The PHA bases the determination of reasonableness and comparability on the
unit inspection report and the rental market information. Hence the reason we want choice
properties in choice areas ensuring we will receive the maximum rental payment. Being known
by the PHA as a property owner who enrolls choice properties in a choice areas that have been
rehabbed will guarantee when you turn other properties over to the PHA they will take
preference over other property owners with substandard properties.




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                                                                                               11 
 
Chapter 4


In this chapter we will discuss what properties are best suited for the Section 8 Housing Choice
Voucher Program. Choosing the right property is our first step towards success with the
program.

Almost any property can be enrolled into the program and eligible once passing the Housing
Quality Standard Inspection although my recommendation is not purchasing, and enrolling
substandard properties located in neighborhoods described as “war zones”. What you need to
be purchasing and enrolling into the program are choice properties in choice locations. You as
the property owner will be receiving premium rent for even the best of neighborhoods, so why
with that being the case would you want to own property in less than marginal neighborhoods.
What we as buy and hold investors are looking for is a valuable asset that we can cash in on
years down the road for a premium sale price. If you are using the premium rent you are
receiving, and applying it to an accelerated principal pay down program you will be further
ahead as the owner of a great property in great neighborhood when it comes time for you to
cash in on your asset. Besides that fact Section 8 tenants will be more interested in leasing a
property in a neighborhood they feel safe to live in. These tenants are providing us as the
property owner great benefits, and we need to maximize by providing a great product. Over the
last 12 months we have seen Section 8 tenants, like any tenant steering clear or those types of
neighborhoods.

Some other property characteristics that we need to look at when determining how to maximize
this strategy are the number of bedrooms. My recommendation when it comes to bedroom
number is three to five bedrooms. The payment standard on a two bedroom is more than
$200/month less than a three bedroom. This will weigh heavily in determining what you will
be able to charge in rent. The difference between a three bedroom and a five bedroom is
minimal, but you can only use the payment standard associated with the number of bedrooms
the applicant is approved for by the PHA.

The last item we want to look at to maximize our return is the type of heating source we have in
the property. As you saw above the monthly utility cost are put into the formula just the same
as your monthly rental payment. When you review the monthly utility cost sheet provided by
the PHA you will see that oil carries the highest cost. So, if you have natural gas or electric for
the heating you will recognize a higher possible rental rate. Oil on a three bedroom can put as
much as $175/month, where natural gas is only $107/month. This difference of $68/month can
mean you receiving $800/month and not $850/month or more.

                                                                                                 12 
 
Chapter 5



Now that we have learned how the PHA calculates subsidies and rental payments, what makes
for a great Section 8 investment property, we must now look at the process of locating a
prospective tenant, and getting them into our property.

When an applicant is found to be eligible by the Public Housing Agency (PHA) they are issued
a Housing Choice Voucher, and the applicant begins their hunt for housing.

So, how is it best for us to reach these applicants. Advertising through the open market with
signage on the property, newspaper classified, and online sites such as craigslist.com or
backpage.com is one way, although most of those do carry an unneeded cost. My
recommendation here is to go right to the source of the voucher. If you choose, you can contact
the PHA, provide them with your name, contact information, and information about your rental
unit or units, and they will provide applicants this information immediately after they receive
their voucher. If an applicant has interest in your unit they will contact you to schedule an
appointment to view your property. If you use a property manager they may also submit your
property to the PHA. This is the best way to advertise your property to Section 8 tenants.

With the demand for Section 8 housing units you will begin to receive calls within one to two
weeks of placing your property with the PHA.

When you have found a prospective tenant you as the property owner should use the due
diligence in screening the Section 8 tenant as you would with private tenants with one exception
and that is reviewing the voucher.

What you need to be looking for on the voucher is the expiration date, and the number of
bedrooms the applicant is approved for. Remember this will determine what payment standard
the PHA will use when determining if the rental rate will fit that applicants criteria. Even
though a tenant may be approved for three bedrooms they can still rent a four or five bedroom
unit from you, the PHA will just as stated calculate off the three bedroom.

The next items you as the property owner want to look at when screening this tenant are the
same as a private tenant. They would include a personal interview with the prospective tenant.
This is your opportunity to get a feel for what type of person the tenant may be. One rule I use,
is if a prospective tenant does not look me in the eye I will think twice about renting to them.
This may be a myth, but has held true for me. If the applicant provides you with previous
landlord information we need to contact them regarding damage to their premise, or complaints
from the neighbors, as well as their reference. Make sure that your tenant selection standards
                                                                                                13 
 
are based on objective, business-related considerations. Tenant selection must not be based on
race, color, age, religion, sex, familial status, disability, or any other discriminatory factors.
Remember here the PHA does perform background checks for criminal charges, financial
judgments, and the applicant’s financial ability to afford the unit. The PHA does not screen
families for their suitability as renters. That is your job as the property owner.

Once you have determined that you have found a tenant that you would like to offer your
property to you must prepare the documents and information the PHA will need to approve the
rental arrangements.

You must submit a copy of the lease you will be using to the PHA along with a Request for
Tenancy Approval form (RTA). The RTA was provided to the applicant at the time they
received their voucher. The RTA will be reviewed by the PHA to determine if the unit is the
correct size and the proposed rent is approvable, and tenants total monthly housing expenses do
not exceed the 40% limit.

The lease that you provide the PHA must include the following:

    ‐ Name of the owner

    ‐ Name of the tenant

    ‐ Unit rented (address, apartment number, and any other information needed to identify
      the unit)

    ‐ Term of lease

          o Initial term
          o Renewal terms

    ‐ Amount of monthly rent

    ‐ Utilities and appliances to be supplied by the property owner

    ‐ Utilities and appliances to be supplied by the tenant

Some important additional items that must be included in the lease you are submitting to the
PHA are:


                                                                                                 14 
 
It must comply with state and local landlord tenant laws.

        The lease must also include information regarding the security deposit. With regard to
        the security deposit you may not be able to charge a full first month’s rent due to the
        tenant’s inability to pay this amount. This must be determined on a case by case basis.

        The lease initial term must be for a term no less than one year, and you must address the
        renewal terms and if there is to be a rent increase after that initial term. You may
        increase the monthly rental payment at the end of the initial term, but you must provide
        the tenant and the PHA in writing 60 days prior to this increase.

        The final item your lease must include is notice period for termination of tenancy.

In the forms section at the end of this manual you will find a sample lease, a copy of a RTA,
and a HUD Tenancy Addendum which is a document that must also be included when
submitting. The lease must NOT be signed until the PHA has approved the tenancy.




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                                                                                                  15 
 
Chapter 6



This chapter is dedicated to the largest myth associated with the Section 8 program, and that is
the unit inspection process. Once the Request for Tenancy Approval, the Lease, and the HUD
Tenancy Addendum are received by the PHA you and the tenant will be notified of the date and
time of the Housing Quality Standards Inspection.

You as the property owner need to get out there and take advantage of this opportunity and meet
the inspector at the property and discuss different aspects of the inspection. This will help you
learn more about the Housing Quality Standards, and how you can best prepare for future
inspections. Do not be alarmed if the inspector finds items in noncompliance. This is to be
expected, just chalk it up to inspector job security.

The inspection will be performed on the basis of HUD’s minimum Housing Quality Standards.
These standards have been implemented by HUD nationwide to ensure that all assisted units
meet minimum health and safety standards. In the forms section you will find a copy of sample
inspection form, and you can go to www.hud.gov where you will find a booklet issued by HUD
titled “A Good Place to Live” which describes the general aspects of a unit that must be
inspected for compliance with HQS.



At the time of inspection the individual areas of inspection will receive one of three ratings.


    ‐ Pass – means the condition meets the minimum requirement

    ‐ Inconclusive – means that more information is needed for the inspector to make a
      determination. This finding will be noted if utilities are not on. You as the property
      owner need to make sure that all appliances you will be providing, and all utilities are on
      at the time of inspection.

    ‐ Fail – means that the condition does not meet the minimum requirement and must be
      brought up to the standard before the tenant can receive rental assistance on the unit. All
      fail items must be corrected and approved prior to the execution of the Housing
      Assistance Payments Contract.



                                                                                                  16 
 
The inspection that is performed will be broken down into eight areas that must be reviewed
and found to be in compliance. These areas are as follows:


    ‐ Living room

    ‐ Kitchen

    ‐ Bathroom

    ‐ Other rooms used for living and halls

    ‐ Secondary rooms (not used for living, such as laundry room)

    ‐ Building exterior

    ‐ Heating and Plumbing

    ‐ General Health and Safety


As previously stated you can find in the forms section a sample inspection form the inspector
will be using, and you may also reference the “A Good Place to Live” booklet which can be
found at www.hud.gov , but I will discuss a few important areas of inspection concern.

The first item of concern I will be addressing is paint. Due to the potential of lead based paint,
the inspector will put a great emphasis on paint condition. The exterior of the property cannot
have any peeling, chipping, or cracking paint. All defective surfaces must be properly prepared
and repainted with two coats of non-leaded paint. With regard to the interior of the property
there can be no peeling, chipping, or cracking paint anywhere in the interior of the unit. This
includes floors, walls, ceilings, steps, and all woodwork. This is one area you must be prepared
for and be in compliance. Some localities require a multiple step follow-up if you are found in
non-compliance, but only a few. This is area of inspection you as the property owner with a
couple minute walk around can ensure your property passing.



The next are of importance we will discuss is the windows. All windows accessible from the
outside must have working locks. This includes windows to balconies and fire escapes. All
                                                                                                17 
 
rooms used for living must have windows (with the exception of the bathroom where properly
vented exhaust system will be adequate). All broken or cracked glass must be replaced or
properly repaired. If the windows are designed to be operable, they must open and close.
Windows must have blinds or equivalent, storm screens, and be weather sealed.

The last item to be addressed in this chapter is a list of the top things that regularly fail units at
the initial inspection:

    ‐ Nonfunctional Smoke Detectors

    ‐ Missing or Cracked Electrical Outlet Cover Plates

    ‐ No Railings Where Required

    ‐ Peeling Exterior and Interior Paint

    ‐ Tripping Hazards Caused By Carpets/Vinyl

    ‐ Inoperable Bathroom Fans or No Ventilation in the Bathroom

    ‐ Leaking Faucets or Plumbing

    ‐ No Temperature/Pressure Relief Valve on Water Heater

    ‐ No Drip Leg on the Water Heater

    ‐ No GFI Within 6 Feet of Water

    ‐ No Rear Egress Light Switch to Illuminate the Kitchen

    ‐ Window Condition: Missing sash cords, locks, shades or storm windows, cracked
      windowpanes

    ‐ No Inspection Sticker on the Electrical Box or Missing Sockets or Evidence of
      Tampering




                                                                                                         18 
 
If the housing unit does not pass the initial inspection, you will be notified in writing of any
item that failed and given a reasonable time to make repairs. As I said early in this chapter you
as the property owner want to be at this inspection even if you employ a property manager, so
you understand what it is the inspector finds to be in non-compliance and they recommend you
do to remedy the issue. When the repairs are complete, the PHA will verify that they have been
made. The PHA is not responsible for any rental payments until the unit passes and you have
signed a contract with the PHA, so do not move the tenant in until this process is complete.




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                                                                                                19 
 
Chapter 7



At this point of the Section 8 Housing Choice Voucher Program approval process you will be
contacted by your local PHA once the lease you provided and the unit condition inspection are
approved.

You as the property owner will sign a Housing Assistance Payment Contract with the PHA.
This contract is between you and the PHA, and allows you to receive payment. In the forms
section you find a sample Housing Assistance Payment Contract.

Once the Housing Assistance Payment Contract is signed you will now want to contact the
tenant, and schedule an appointment to sign the lease. At the time of lease signing you also
want to have a pre-move-in property inspection report that you use with your unassisted tenants.
Aside from this inspection report you will also have the inspection report created during the
HQS inspection performed by the PHA inspector.

The PHA will begin making payments to you after all of the above have been performed. The
PHA will mail or direct deposit your payment on or about the first of each month, and will
continue to make payments as long as the following conditions are met:

      The unit continues to meet HQS.

      The tenant remains eligible for assistance and resides in the unit.

      The owner remains in compliance with the Housing Assistance Payment Contract.

In the rare case the PHA fails to make timely payment, it may be obligated by state or local law
to pay a late fee.

If the entire rental payment amount is not covered by the tenants subsidy they will be
responsible to make that difference in payment directly to you, the property owner. It is your
responsibility to collect this portion of the rent not the PHA’s.




                                                                                                 20 
 
Chapter 8



In this final chapter we will discuss evictions and how they are to be handled when renting to a
Section 8 Housing Choice Voucher tenant.

During the term of the lease and the Housing Assistance Payment Contract that runs congruent
with the lease, the property owner must perform evictions as per your state’s landlord tenant
law. The process by which you proceed is the same as an unassisted tenant. If your state
requires you must notices be posted, you post them, if they require you file a landlord tenant
complaint with the District Justice, file it.

The only step that is not associated with an unassisted tenant is that a copy of all notices,
documents, and filings must be provided to the PHA in a timely manner. I recommend the
same day you perform them.

As I stated earlier in this manual you may not terminate the lease for no good cause during the
initial lease term, due to the fact you are under contract with the PHA.

The final item I wanted to discuss with you are the items you will need to perform annually if
you opt to continue to stay enrolled in the Section 8 Housing Choice Voucher Program.

Your unit must have an annual inspection. You will be notified by the PHA with the date and
time of the inspection. Once again, get out there and be involved in the inspection process.
This is a great time to determine any damages caused by the tenant beyond normal wear and
tear, and have them documented by yourself and the inspector. If items are found to be in non-
compliance adequate time will be provided for you and the tenant to make the needed repairs.

Your tenant annually will also be reviewed by the PHA to verify if there is a change in their
level of assistance.

I hope this manual has opened your eyes to the great opportunities that exist for you as a
property owner, and cleared up any misconceptions you may have had about the Section 8
Housing Assistance Program.

To purchase turnkey wholesale priced properties you must TEXT "PA Deals" to 41411 or go to

www.padeals.com NOW! We have a "FREE" Wealth Creation Event coming soon and if

you are serious about your future we will see you there!
                                                                                                  21 
 

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E-Book Succeed With Section 8-by Zack Wiest

  • 1. Copyright 2011 | Provided by PA Deals, LLC www.padeals.com
  • 2.   Table of Contents Chapter 1 What Is Section 8 …………………………………… History of the Program …..………………………… Goal of Section 8 …………………………………… Regulatory Body …………………………………… Chapter 2 Tenant Requirements ……..………………………… Property Owner Requirements ................................... Chapter 3 Payment Standards ...................................................... Applicant’s Subsidy .................................................... Rent Calculation ......................................................... Chapter 4 Property Selection ...................................................... Chapter 5 Tenant Found .............................................................. Subm itting For Tenancy and Unit Approval .............. Chapter 6 Inspection Process ...................................................... Chapter 7 Lease and Contract Signing ......................................... Chapter 8 Evictions ...................................................................... 1   
  • 3. Chapter 1 The Section 8 Housing Choice Voucher Program is a federally funded program designed to provide housing to low income families. In order to better understand what the program is, we will first need to address the history of the housing program. In the paragraphs to follow I will discuss the program from its inception, through it many changes to today’s current form. 1937 - This marked the beginning of federally assisted housing in the United States. The US Housing Act was formed based on the US Constitution under Article 1, Section 8, which states – to provide for the general welfare. The Housing Act was part of President Roosevelt’s depression era legislation aimed at providing jobs to the submerged middle class. Federal funds were used to construct the housing units, and once completed managed and maintained by local public housi ng agencies. 1961 - The first change to the program did not occur until now when Congress amended the US Housing Act, thus creating the Section 23 Leased Housing Program. This is the predecessor to our modern day program. Major changes that came along with the new program was the first use of privately owned properties. Although, the properties were privately owned the local housing agencies continued to manage and maintain the units. The local housing agencies signed a lease with the private owner, and subleased to the Section 23 tenant. Another change to the program occurring at this time was the implementation of tenant rent contributions. 2   
  • 4. 1974 - At this point in history the Section 23 program was amended to create the Section 8 Rental Assistance Program. A lot of changes came along with this new program. The first being the local housing agencies would no longer manage or maintain the privately owned units. The subleasing that occurred with the Section 23 program was also ended, and the tenants would sign directly with the propert y owner. Qualified applicants were now permitted to go out into the open housing market to find housing. Due to studies performed by the federal government showing that substandard housing was no longer a problem, but the high percentage of income being spent on housing. Tenants on the program were now not permitted to pay more than approximately 30% of their adjusted gross income on housing. 1999 - This was the inception of the program we currently use today, the Section 8 Housing Choice Voucher Program. The combination of the Rental Certificate and Rental Voucher programs created this Housing Choice Voucher Program. The local housing agencies were to become the most hands off they had ever been prompting clear tenant and landlord guidelines to be defined. The rules and regulations for the Section 8 Housing Choice Voucher Program are determined by the U.S. Department of Housing and Urban Development (HUD). For the Section 8 Housing Choice Voucher Program to function the local public housing agencies must be able to contract with private owners who have decent, safe, and sanitary rental properties. Most must municipalities have a two month to a year long waiting list due to the shortage of eligible properties and willing property owners. 3    For Special Event Details - TEXT "PA Deals" to 41411 or "CLICK HERE"
  • 5. Chapter 2 In this chapter, we are going to first discuss what makes a tenant applicant eligible for the Section 8 Housing Choice Voucher Program. The first of the criteria we are going to look at is the gross annual income. This eligibility factor is separated into two groups: Extremely Low, which is 30% of the median income, and Very Low, which is 50% of the median income in a set locality. The creation of two groups is mandated by HUD. In accordance with HUD’s Rules and Regulations that govern the Section 8 program, not less than 75% of families admitted during the fiscal year from the waiting list shall be extremely low-income families. Below you see a chart showing the income eligibility levels in Dauphin County, PA. $60,000 $40,000 $20,000 30% Income $0 50% Income The next determining factor is also represented on this chart, and that is the number of persons in the family. The number of persons in a family is not closed to mother, father, and children. It can include a non-relative that requires assistance, an elderly grandparent that needs assistance, or even a grandparent that does not need assistance, but is part of the family unit. The last eligibility factor we are going to look at is the applicant must be a United States citizen, or a non-citizen who has eligible immigration status. Items that immediately make an applicant ineligible to receive a voucher are outstanding judgments for unpaid rent. If they have drug related or violent criminal charges within the last five years they are not eligible. If the applicant has been evicted while on the voucher program, 4   
  • 6. or performed fraud against the PHA (Public Housing Agency) these would also make the applicant ineligible. Now, I would like to look at what makes a property owner eligible or ineligible for the program. First and foremost, the property must meet HUD guidelines regarding the property condition inspection that will be performed either before a tenant is found, or in most municipalities after a tenant is found. This inspection process will be discussed in a later chapter. The property owner must have paid current all property taxes to include municipal, county, and school. Any utility that is municipal must all be paid current. Just as in the case of the tenant, the property owner may not have been convicted in last five years of criminal drug charges. Lastly, if you have performed fraud against the PHA, or violated a prior Housing Assistance Program Contract you are not eligible. The property portion of eligibility is simply summed up to you must a have a safe and sanitary property that is in good tax and utility payment status. PA Deals, LLC offers a one of a kind solution for new and seasoned investors alike! Whether you own 10 rental properties or 0 rental properties we have something for you. After 800 plus real estate deals it is safe to say we know a little about what we are doing and you would be foolish to not benefit from vast investment knowledge. If you are ready to get started or still have more questions we offer a FREE Wealth Creation Event every 2nd and 4th Saturday of the month. You can register one of two ways... TEXT "PA Deals" to 41411 or go to www.padeals.com A Successful Future Is Yours To Take - Will You Take It? 5   
  • 7. Chapter 3 Why implement the Section 8 Housing Choice Voucher Program into your buy and hold real estate investing strategy? There are a few reasons that top the list, and guaranteed rental payments, premium rental payments, and units kept typically in better condition are just a few There will be no more chasing your rent money each and every month because it will come to you by way of a United States government check. As far as premium rental payments go we will discuss that later in this chapter. In regard to units being kept in better condition than a private tenant this I feel is due to the repercussions that come with the Section 8 tenant. If a private tenant damages your property they can simply leave your property, and rent another property never noting you as a previous landlord. What are the repercussions from that tenant, none. With a Section 8 tenant if they cause damage, or are evicted from your property and you notify the PHA they will lose their voucher eligibility for five years. So, if this individual is in need of housing, and they do not obey your lease and respect your property they have no means of housing for five years. In my eyes this a pretty large deterrent. Lastly, before I move on to the explanations of the above, I would like to mention the low turnover rate associated with Section 8 tenants. At this point there is no deadline on how long a tenant may remain on the program. If you ask property owners that are currently using this program their average tenant has been in their property for three to four years. I will end the reasons why to implement this strategy with stating that the average market time of a Section 8 eligible property is four to six weeks including the property inspection process. As I stated earlier, 90% of all PHA Section 8 programs across the United States have waiting lists, or closed to new applicants. A sample of this is in Central Pennsylvania where housing agency case workers are pulling 250-400 applications every month to review for eligibility, these will become new tenants looking for housing. One Central PA city opened its application process for one day and received more than 500 applications that day alone. 6   
  • 8. What I will now explain is how we will recognize premium and guaranteed rent, while explaining the exact calculations the PHA will be using. In the chart below you can see the difference between private tenant rental payments and a Section 8 tenant guaranteed rental payment in the Harrisburg, PA area. $1,000.00 $800.00 $600.00 $400.00 $200.00 Avg. Market Rent $0.00 Avg. Section 8 Rent (These rental rates reflect the property owner paying water, sewer, and trash.) The first item I will show you how to calculate is the subsidy an applicant receives from the PHA. The subsidy is the amount of assistance the applicant receives on a monthly basis. The maximum housing assistance that eligible families can receive under the voucher program is the difference between 30% of the net household income and the current payment standard. Their monthly housing expense may not exceed 40% of the net household income, this regulation was put in place in 1974, which we discussed earlier. Let’s begin to calculate an applicant’s subsidy, and see how it works. I mentioned in the previous paragraph that we must use the current payment standard. The current payment standards are fair market rents as determined by HUD. The payment standards vary from one locality to another. 7   
  • 9. The chart below reflects the payment standards for Harrisburg, PA as on January 1, 2009. FMR $1,400 $1,206 $1,200 $1,012 $1,049 $1,000 $802 $800 $558 $638 $600 $400 $200 FMR $0 Now that we have the payment standards for our locality, which are available at your local housing authority we will need to determine the next factor of the subsidy. To do this we must calculate the applicant’s adjusted monthly income. The adjusted monthly income is derived from the applicant’s monthly income less applicable deductions. Applicable deductions are dependents, health care, etc... For example purposes we will be assuming the applicant is eligible for a three bedroom, and has an adjusted monthly income of $500, which is average for an applicant qualifying as an extremely low income family. First calculation is determining 30% of the adjusted monthly income $150.00/mo. We now use our payment standard chart for a three bedroom $1,012.00/mo. 8   
  • 10. The subsidy is a simple subtraction calculation. Subtract the 30% of the adjusted monthly income for the payment standard. In this case the applicant would be eligible for $862.00/mo. Payment Standard = $1,012 Adjusted Monthly Income = $150 Subsidy = $1,012 - $150 = $862 The next item is how the PHA will calculate if your property will fit this applicant’s requirements. The first item the PHA will look at when determining this is the monthly utility cost. Each locality has a document that specifies what utility cost will be used in this calculation. This chart assigns cost based on many factors. What type of heat system – gas, oil, coal, or electric. Type of property – detached, attached, or semi-detached. Number of stories, interior unit if it is attached, and many more property characteristics. For this example, we will be using a property that is a semi-detached 3 bedroom unit with natural gas heat, cooking, and hot water. Using the utility chart for Harrisburg, PA below we will calculate the tenants monthly utility cost. Heating $107.00/month Cooking $13.00/m onth Electric $43.00/m onth Water Heat $34.00/m onth Water $40.00/m onth Sewer $25.00/m onth Trash Collection $18.00/month Total $280.00/month At this point in the calculation we have determined all the factors we need to input to find if this property will fit for this applicant. 9   
  • 11. The property rent and the utilities are totaled to find the applicant’s total monthly housing expense to make sure we do not exceed the 40% cap. For this example the owner of this property is attempting to rent his 3 bedroom 1 bath semi- detached single family home for $850/month with the tenant paying all utilities. Rental Payment $850.00/month Utilities (which we previously calculated) $280.00/month Total Monthly Expense $1130.00/ month Subtract the applicant’s subsidy $862.00/month Tenants Total Monthly Housing Expense $268.00/month 30-40% of applicant’s adjusted income ($150 - $200/month) The projected tenant expense would exceed the 40% of the adjusted gross income, thus disqualifying this payment arrangement. This property can easily qualify if the property owner includes water, sewer, and trash in the monthly rental payment of $850. The total for water, sewer, and trash using the utility cost chart is $83/month. This would reduce the $268/month total monthly housing expense to $185/month now qualifying the property at these terms. As stated in the beginning of this chapter I was going to show you how to recognize not only premium, but guaranteed rental payments. These are two great attributes any buy and hold investor looking to build true wealth could ask for. 10   
  • 12. The property owner of the example property will realize not only the premium rent I stated they would, but in this example it will be 100% guaranteed government payment each and every month. The average 3 bedroom 1 bath semi-detached single family home in Harrisburg, PA average monthly rent is $750 including water, sewer, and trash. I have just showed you how this owner will be receiving $850/month for the exact same property. This is an additional $100/month the property owner would be leaving on the table not using the Section 8 Housing Choice Voucher program. If the property owner is using an accelerated principle pay-down program that additional $100/month alone can take a 30 year mortgage to 20 years. Better than the premium rent is that this rent payment will be a guaranteed rental payment. The $850/month this property owner is charging the applicant is less than the $862/month subsidy they are approved for, so the $850 each and every month will be delivered via United States government check, or even better direct deposit. The additional $12/month, or the difference between the $850 the owner is charging and the $862 subsidy is mailed to the tenant each month as a utility supplement. With the guaranteed rental payment benefit I just explained the headaches involved with chasing rental payments were eliminated. I have now showed you how to eliminate this headache, and get paid additional rent to do so. Although there are no HUD ceilings on the rents charged in the Section 8 Housing Choice Voucher Program, rents must still be reasonable and comparable to those charged for similar unassisted units. The PHA bases the determination of reasonableness and comparability on the unit inspection report and the rental market information. Hence the reason we want choice properties in choice areas ensuring we will receive the maximum rental payment. Being known by the PHA as a property owner who enrolls choice properties in a choice areas that have been rehabbed will guarantee when you turn other properties over to the PHA they will take preference over other property owners with substandard properties. Your Future Is Becoming The Present... TEXT "PA Deals" to 41411 or go to www.padeals.com 11   
  • 13. Chapter 4 In this chapter we will discuss what properties are best suited for the Section 8 Housing Choice Voucher Program. Choosing the right property is our first step towards success with the program. Almost any property can be enrolled into the program and eligible once passing the Housing Quality Standard Inspection although my recommendation is not purchasing, and enrolling substandard properties located in neighborhoods described as “war zones”. What you need to be purchasing and enrolling into the program are choice properties in choice locations. You as the property owner will be receiving premium rent for even the best of neighborhoods, so why with that being the case would you want to own property in less than marginal neighborhoods. What we as buy and hold investors are looking for is a valuable asset that we can cash in on years down the road for a premium sale price. If you are using the premium rent you are receiving, and applying it to an accelerated principal pay down program you will be further ahead as the owner of a great property in great neighborhood when it comes time for you to cash in on your asset. Besides that fact Section 8 tenants will be more interested in leasing a property in a neighborhood they feel safe to live in. These tenants are providing us as the property owner great benefits, and we need to maximize by providing a great product. Over the last 12 months we have seen Section 8 tenants, like any tenant steering clear or those types of neighborhoods. Some other property characteristics that we need to look at when determining how to maximize this strategy are the number of bedrooms. My recommendation when it comes to bedroom number is three to five bedrooms. The payment standard on a two bedroom is more than $200/month less than a three bedroom. This will weigh heavily in determining what you will be able to charge in rent. The difference between a three bedroom and a five bedroom is minimal, but you can only use the payment standard associated with the number of bedrooms the applicant is approved for by the PHA. The last item we want to look at to maximize our return is the type of heating source we have in the property. As you saw above the monthly utility cost are put into the formula just the same as your monthly rental payment. When you review the monthly utility cost sheet provided by the PHA you will see that oil carries the highest cost. So, if you have natural gas or electric for the heating you will recognize a higher possible rental rate. Oil on a three bedroom can put as much as $175/month, where natural gas is only $107/month. This difference of $68/month can mean you receiving $800/month and not $850/month or more. 12   
  • 14. Chapter 5 Now that we have learned how the PHA calculates subsidies and rental payments, what makes for a great Section 8 investment property, we must now look at the process of locating a prospective tenant, and getting them into our property. When an applicant is found to be eligible by the Public Housing Agency (PHA) they are issued a Housing Choice Voucher, and the applicant begins their hunt for housing. So, how is it best for us to reach these applicants. Advertising through the open market with signage on the property, newspaper classified, and online sites such as craigslist.com or backpage.com is one way, although most of those do carry an unneeded cost. My recommendation here is to go right to the source of the voucher. If you choose, you can contact the PHA, provide them with your name, contact information, and information about your rental unit or units, and they will provide applicants this information immediately after they receive their voucher. If an applicant has interest in your unit they will contact you to schedule an appointment to view your property. If you use a property manager they may also submit your property to the PHA. This is the best way to advertise your property to Section 8 tenants. With the demand for Section 8 housing units you will begin to receive calls within one to two weeks of placing your property with the PHA. When you have found a prospective tenant you as the property owner should use the due diligence in screening the Section 8 tenant as you would with private tenants with one exception and that is reviewing the voucher. What you need to be looking for on the voucher is the expiration date, and the number of bedrooms the applicant is approved for. Remember this will determine what payment standard the PHA will use when determining if the rental rate will fit that applicants criteria. Even though a tenant may be approved for three bedrooms they can still rent a four or five bedroom unit from you, the PHA will just as stated calculate off the three bedroom. The next items you as the property owner want to look at when screening this tenant are the same as a private tenant. They would include a personal interview with the prospective tenant. This is your opportunity to get a feel for what type of person the tenant may be. One rule I use, is if a prospective tenant does not look me in the eye I will think twice about renting to them. This may be a myth, but has held true for me. If the applicant provides you with previous landlord information we need to contact them regarding damage to their premise, or complaints from the neighbors, as well as their reference. Make sure that your tenant selection standards 13   
  • 15. are based on objective, business-related considerations. Tenant selection must not be based on race, color, age, religion, sex, familial status, disability, or any other discriminatory factors. Remember here the PHA does perform background checks for criminal charges, financial judgments, and the applicant’s financial ability to afford the unit. The PHA does not screen families for their suitability as renters. That is your job as the property owner. Once you have determined that you have found a tenant that you would like to offer your property to you must prepare the documents and information the PHA will need to approve the rental arrangements. You must submit a copy of the lease you will be using to the PHA along with a Request for Tenancy Approval form (RTA). The RTA was provided to the applicant at the time they received their voucher. The RTA will be reviewed by the PHA to determine if the unit is the correct size and the proposed rent is approvable, and tenants total monthly housing expenses do not exceed the 40% limit. The lease that you provide the PHA must include the following: ‐ Name of the owner ‐ Name of the tenant ‐ Unit rented (address, apartment number, and any other information needed to identify the unit) ‐ Term of lease o Initial term o Renewal terms ‐ Amount of monthly rent ‐ Utilities and appliances to be supplied by the property owner ‐ Utilities and appliances to be supplied by the tenant Some important additional items that must be included in the lease you are submitting to the PHA are: 14   
  • 16. It must comply with state and local landlord tenant laws. The lease must also include information regarding the security deposit. With regard to the security deposit you may not be able to charge a full first month’s rent due to the tenant’s inability to pay this amount. This must be determined on a case by case basis. The lease initial term must be for a term no less than one year, and you must address the renewal terms and if there is to be a rent increase after that initial term. You may increase the monthly rental payment at the end of the initial term, but you must provide the tenant and the PHA in writing 60 days prior to this increase. The final item your lease must include is notice period for termination of tenancy. In the forms section at the end of this manual you will find a sample lease, a copy of a RTA, and a HUD Tenancy Addendum which is a document that must also be included when submitting. The lease must NOT be signed until the PHA has approved the tenancy. Thank you for registering for our FREE Wealth Creation Event! What you have not registered? What are you waiting for - TEXT "PA Deals" to 41411 or go to www.padeals.com, NOW!!! 15   
  • 17. Chapter 6 This chapter is dedicated to the largest myth associated with the Section 8 program, and that is the unit inspection process. Once the Request for Tenancy Approval, the Lease, and the HUD Tenancy Addendum are received by the PHA you and the tenant will be notified of the date and time of the Housing Quality Standards Inspection. You as the property owner need to get out there and take advantage of this opportunity and meet the inspector at the property and discuss different aspects of the inspection. This will help you learn more about the Housing Quality Standards, and how you can best prepare for future inspections. Do not be alarmed if the inspector finds items in noncompliance. This is to be expected, just chalk it up to inspector job security. The inspection will be performed on the basis of HUD’s minimum Housing Quality Standards. These standards have been implemented by HUD nationwide to ensure that all assisted units meet minimum health and safety standards. In the forms section you will find a copy of sample inspection form, and you can go to www.hud.gov where you will find a booklet issued by HUD titled “A Good Place to Live” which describes the general aspects of a unit that must be inspected for compliance with HQS. At the time of inspection the individual areas of inspection will receive one of three ratings. ‐ Pass – means the condition meets the minimum requirement ‐ Inconclusive – means that more information is needed for the inspector to make a determination. This finding will be noted if utilities are not on. You as the property owner need to make sure that all appliances you will be providing, and all utilities are on at the time of inspection. ‐ Fail – means that the condition does not meet the minimum requirement and must be brought up to the standard before the tenant can receive rental assistance on the unit. All fail items must be corrected and approved prior to the execution of the Housing Assistance Payments Contract. 16   
  • 18. The inspection that is performed will be broken down into eight areas that must be reviewed and found to be in compliance. These areas are as follows: ‐ Living room ‐ Kitchen ‐ Bathroom ‐ Other rooms used for living and halls ‐ Secondary rooms (not used for living, such as laundry room) ‐ Building exterior ‐ Heating and Plumbing ‐ General Health and Safety As previously stated you can find in the forms section a sample inspection form the inspector will be using, and you may also reference the “A Good Place to Live” booklet which can be found at www.hud.gov , but I will discuss a few important areas of inspection concern. The first item of concern I will be addressing is paint. Due to the potential of lead based paint, the inspector will put a great emphasis on paint condition. The exterior of the property cannot have any peeling, chipping, or cracking paint. All defective surfaces must be properly prepared and repainted with two coats of non-leaded paint. With regard to the interior of the property there can be no peeling, chipping, or cracking paint anywhere in the interior of the unit. This includes floors, walls, ceilings, steps, and all woodwork. This is one area you must be prepared for and be in compliance. Some localities require a multiple step follow-up if you are found in non-compliance, but only a few. This is area of inspection you as the property owner with a couple minute walk around can ensure your property passing. The next are of importance we will discuss is the windows. All windows accessible from the outside must have working locks. This includes windows to balconies and fire escapes. All 17   
  • 19. rooms used for living must have windows (with the exception of the bathroom where properly vented exhaust system will be adequate). All broken or cracked glass must be replaced or properly repaired. If the windows are designed to be operable, they must open and close. Windows must have blinds or equivalent, storm screens, and be weather sealed. The last item to be addressed in this chapter is a list of the top things that regularly fail units at the initial inspection: ‐ Nonfunctional Smoke Detectors ‐ Missing or Cracked Electrical Outlet Cover Plates ‐ No Railings Where Required ‐ Peeling Exterior and Interior Paint ‐ Tripping Hazards Caused By Carpets/Vinyl ‐ Inoperable Bathroom Fans or No Ventilation in the Bathroom ‐ Leaking Faucets or Plumbing ‐ No Temperature/Pressure Relief Valve on Water Heater ‐ No Drip Leg on the Water Heater ‐ No GFI Within 6 Feet of Water ‐ No Rear Egress Light Switch to Illuminate the Kitchen ‐ Window Condition: Missing sash cords, locks, shades or storm windows, cracked windowpanes ‐ No Inspection Sticker on the Electrical Box or Missing Sockets or Evidence of Tampering 18   
  • 20. If the housing unit does not pass the initial inspection, you will be notified in writing of any item that failed and given a reasonable time to make repairs. As I said early in this chapter you as the property owner want to be at this inspection even if you employ a property manager, so you understand what it is the inspector finds to be in non-compliance and they recommend you do to remedy the issue. When the repairs are complete, the PHA will verify that they have been made. The PHA is not responsible for any rental payments until the unit passes and you have signed a contract with the PHA, so do not move the tenant in until this process is complete. We cannot not force you to create wealth for you future we can only show you the way and assist you, remember the old adage; you can lead a horse to water but you cannot make him drink. If you are serious about your future you need to TEXT "PA Deals" to 41411 or go to www.padeals.com 19   
  • 21. Chapter 7 At this point of the Section 8 Housing Choice Voucher Program approval process you will be contacted by your local PHA once the lease you provided and the unit condition inspection are approved. You as the property owner will sign a Housing Assistance Payment Contract with the PHA. This contract is between you and the PHA, and allows you to receive payment. In the forms section you find a sample Housing Assistance Payment Contract. Once the Housing Assistance Payment Contract is signed you will now want to contact the tenant, and schedule an appointment to sign the lease. At the time of lease signing you also want to have a pre-move-in property inspection report that you use with your unassisted tenants. Aside from this inspection report you will also have the inspection report created during the HQS inspection performed by the PHA inspector. The PHA will begin making payments to you after all of the above have been performed. The PHA will mail or direct deposit your payment on or about the first of each month, and will continue to make payments as long as the following conditions are met: The unit continues to meet HQS. The tenant remains eligible for assistance and resides in the unit. The owner remains in compliance with the Housing Assistance Payment Contract. In the rare case the PHA fails to make timely payment, it may be obligated by state or local law to pay a late fee. If the entire rental payment amount is not covered by the tenants subsidy they will be responsible to make that difference in payment directly to you, the property owner. It is your responsibility to collect this portion of the rent not the PHA’s. 20   
  • 22. Chapter 8 In this final chapter we will discuss evictions and how they are to be handled when renting to a Section 8 Housing Choice Voucher tenant. During the term of the lease and the Housing Assistance Payment Contract that runs congruent with the lease, the property owner must perform evictions as per your state’s landlord tenant law. The process by which you proceed is the same as an unassisted tenant. If your state requires you must notices be posted, you post them, if they require you file a landlord tenant complaint with the District Justice, file it. The only step that is not associated with an unassisted tenant is that a copy of all notices, documents, and filings must be provided to the PHA in a timely manner. I recommend the same day you perform them. As I stated earlier in this manual you may not terminate the lease for no good cause during the initial lease term, due to the fact you are under contract with the PHA. The final item I wanted to discuss with you are the items you will need to perform annually if you opt to continue to stay enrolled in the Section 8 Housing Choice Voucher Program. Your unit must have an annual inspection. You will be notified by the PHA with the date and time of the inspection. Once again, get out there and be involved in the inspection process. This is a great time to determine any damages caused by the tenant beyond normal wear and tear, and have them documented by yourself and the inspector. If items are found to be in non- compliance adequate time will be provided for you and the tenant to make the needed repairs. Your tenant annually will also be reviewed by the PHA to verify if there is a change in their level of assistance. I hope this manual has opened your eyes to the great opportunities that exist for you as a property owner, and cleared up any misconceptions you may have had about the Section 8 Housing Assistance Program. To purchase turnkey wholesale priced properties you must TEXT "PA Deals" to 41411 or go to www.padeals.com NOW! We have a "FREE" Wealth Creation Event coming soon and if you are serious about your future we will see you there! 21