How to Screen a Section 8 Tenant -- The Background Check

Disclaimer: This blog does NOT go into the entire screening process. I only describe the differences when screening a Section 8 Housing Choice Voucher holder.

Income Verification

This is my favorite difference. When a tenant applies to get a Housing Choice Voucher, she is required to submit boatloads of paperwork and income verification. For details please see my blog about How to Get Section 8.

I always refer to tenants as she because in Detroit, for my clientele, I rarely have men apply.

I know if someone has a Housing Choice Voucher that her portion of rent is equivalent to 30% of her income. This is incredibly helpful to me to not go through the bother of collecting every shred of evidence and then verifying its validity. I still gather evidence though but mostly because, when I do tenant screening, I am always thinking of what a skip tracer may need to find and garnish the tenant should the tenant leave without paying full rent. Proof of a job is very helpful. If she only has disability or social security, then I know she is a higher risk tenant. We cannot garnish a person’s disability or social security income.

Another good thing about knowing the tenant has 30% of the rent herself to pay is that I know she actually can afford that 30%. If she lets me know she could not pay it, I know to question what choices she has made not to pay it. The most common excuse I hear is funeral expenses. “The flowers were so expensive.” Regardless of how cold I seem, that is a choice. I will start the eviction process. Something was valued above housing. It is for her to figure out how to catch the past rental payment up before her court date. And with Section 8 I am required to turn in my notice of eviction and then eventual judgment. People with Section 8 seem to me to be more careful not to make these choices.

If the tenant’s income should change due to a loss of a job or having a baby and needing time off from work, she may no longer have 30% to pay me. Section 8 will pay the whole rent at that time. That is a wonderful reassurance!

See my blog and video about the Pros and Cons of Section 8.

Felonies

HUD has rules about which felons are not allowed to have a voucher. Look into Chapter 5 in the HUD book for details. http://bit.ly/HUDChapter5. But each PHA, who distributes the vouchers, have their own set of rules of which felons they will accept and which ones they will not.

Then I have my own rules of which felons I will accept and which ones I will not. My rules seem to coincide with the PHA rules from what I have been able to tell so far once I’ve done my digging into people’s felonies. My own rule is more open to finding out the whole story. I’ve denied a non Section 8 applicant pedophile rapist despite the fact that he seemed happily married with a small child and had an excellent job. I had the right to deny him. He was not a protected class. His girlfriend confirmed he had just gotten out of jail for five years. She also confirmed it was no Romeo & Juliet case of young consensual love either. She assured me though that he just had a bad attorney and it wasn’t even true so I asked her to show me the court records or proof he had presented to his attorney, but she did not comply. But I have accepted people with marijuana offenses from the days it was totally illegal to even possess marijuana. I have accepted a car jacker who had done his time 25 years ago and had lived a clean life since. He is one of my few male tenants and he is doing well. None of these examples had Section 8. The felons I have seen with Section 8 were usually drunk drivers. I do not see very many felons who have a Housing Choice Voucher.

What you need to be aware of though is that someone while on the voucher can commit a felony and their PHA may never know. Their records are only run randomly once they have been granted a Housing Choice Voucher. I wonder if they ever run them, knowing how short staffed they all seem to be. In my video I talk about Ferlita the Felon. I believe she must have lost her voucher when she did 5 years in jail. I found her record as I was editing my video. At the time she applied for my house, though, she still had a voucher and had not yet had her court case apparently or her sentencing. She wanted my house, she said, “even though that closet isn’t big enough for all my shoes.” I kindly lost touch with her.

Disclaimer: I’m not sure this is the one who came to view my house, but this person’s record is for identity theft and her name is Ferlita. Go to Google Images and look up mug shots for your applicants. You may be surprised!

What HUD will not allow are people with drug related felonies. People who had an eviction for anything drug related also were denied Housing Choice Vouchers. But the eviction rule is only if they were evicted for something drug related within the last 3 years.

From HUD’s Chapter Five. The following seems promising but each person on Section 8 that is denied the voucher has the right to appeal. I have heard it is harder to remove someone from Section 8 because these appeals often favor the voucher holders.

“In determining whether to deny assistance based on drug-related cirminal activity or violent crimial activity, the PHA may deny assistance if the preponderance of evidence indicates that a family member has engaged in such activity, regardless of whether the family member has been arrested or convicted.”

What landlord evicts tenants for drug related activity? NOT ME! I prefer not to mess with drug dealers. I will evict them on anything BUT drug dealing. I have had a couple drug dealers as tenants. They were always the boyfriend, not my tenant, who never seemed to stay very long. When he was there, though, the rent was always paid! We did find one of our front doors replaced after one of the boyfriends ended up in jail and paying the rent got harder for the girlfriend who was our tenant. The neighbors later told us about the drug raid. Maybe the neighbors reported him to the police? We just didn’t know and I’m grateful we didn’t because I am not armed to take on drug dealers.

My question is if HUD denies people with drug related evictions, I’m curious how often they even come across such people. So I ALWAYS DO MY OWN CHECK FOR FELONIES! And I do all the rest of the background checking as well, such as doing a home visit.

Evictions

A very common mistake that landlords make is assuming if someone has a Section 8 voucher and she has had an eviction that she will lose her voucher. THAT IS NOT TRUE! For one, evictions do not disqualify tenants from being awarded a voucher in the first place. It only makes sense. They need the voucher because they couldn’t afford to live.

With my new-to-Section-8 applicants, I dig deep into their evictions. I look them up on www.36thDistrictCourt.org. I read through every line. Then I call the applicant and ask her what happened there. It’s often a case of a slumlord. But if she would’t pay the rent because he was a slumlord, she needed to have put the rent into escrow until a judge made the determination. Gathering the applicant’s story before I call the landlord is always helpful. I will ask the landlord too what the case was all about. I get both sides of the story and decide for myself where the truth may lie.

I do NOT accept applicants who took the eviction so far that the landlord had to hire a bailiff to haul them out of his or her property. No matter what financial situation someone is in, that to me is evil. I will ask the tenants in the initial phone screening if they had a bailiff remove them. There is never a sufficient answer in my mind. Getting to the point of the bailiff is so costly for a landlord. Not to mention, now that tenant has the knowledge of how to stay in a property without paying rent for the longest period of time. They can take their education elsewhere! I definitely never even show them the house.

For my applicants who have used their voucher already at other properties, I STILL look up their record for evictions. It’s really frustrating to me that there isn’t a better way for the PHAs (Public Housing Agencies/Section 8 offices) to know which of their voucher recipients have been evicted. We landlords have the onus of turning in our notices and judgments to the PHAs so they know and can deny someone a voucher. But I was told by one PHA in Detroit, the biggest one, Detroit Housing Commission (DHC), that DHC simply puts the eviction paperwork in a file. They do not have the manpower to move people off the program. Other PHAs take it very seriously. But they still have to go through a whole appeal process with the tenant who will plea her case. And guess who doesn’t get to appear at the appeal? The landlord!

I’ve also read in that Chapter 5 that the voucher holders are also supposed to turn in any notices of eviction or judgments as well. I wonder if that has EVER happened?

So I ALWAYS check for myself if the person has been taken to court for anything that would lead me to believe she would not be good to do business with. I tell applicants on the phone before I even show them a house that I not only care about evictions but I care too about how many times they were even taken to court. I find it egregious that a landlord had to take them to court to get them to pay.

If you don’t have Detroit applicants and that wonderful case lookup feature on www.36thDistrictCourt.org, just see if your city does have a similar website. If not, it is public record if someone has been taken to court. Find out which court handles landlord tenant issues and call them with the applicant’s name. The court should be able to tell you what the cases were, who the plaintiffs were, how it was ruled, and the address of the tenant at the time. And NEVER trust your background check software. Not all courts report evictions. And they certainly don’t report all the other nonpayment cases that were adjourned — which likely means the tenant or the landlord was a no-show. But the landlord STILL got so far as to having needed to pay to have it filed to get the tenant to catch up or leave. You need to know this!

The Best Most Surprising Tip

If an applicant already has used her voucher renting from someone else, the PHA is REQUIRED BY HUD to share with the potential new landlord the contact information for the current and past landlord.

Good luck getting the PHA to answer the phone! To bypass this issue, on your rental application, always get the name and email address of that applicant’s Section 8 caseworker. Email the caseworker and get the information.

Other than simply the contact information, it is up to the PHA if they will share with you even more information. This is what HUD’s Chapter 5 states about this

“The PHA is required to provide the owner with:

The family’s current and prior address (as shown in the PHA records); and

The name and address (if known) of the landlord at the family’s current and prior addresses.

This information is intended to assist the owner in conducting his or her own screening.

The PHA may choose to provide a prospective owner with additional information it possesses about the family, including information about the tenancy history of family members or about drug-trafficking by family members. If the PHA chooses to provide such information, it should describe how the information was obtained, and encourage the owner to confirm such information.

When developing such a policy, the PHA should consider a whether all information contained in the tenant file should be provided, or if the PHA should provide only information that has been independently confirmed.. The policy must provide that the PHA will give comparable information about all families to all owners.”

By all means, take HUD up on this tool!

The Home Visit

In my next video and blog, I will discuss my very best of the best tools I use to make sure a tenant will not destroy my own property. I pay them a visit where they are living now. I will share with you how I go about this, because I know it seems very AWKWARD! But SO WHAT! It needs to be done. This is a very large business transaction. We landlords need to use every tool in our arsenal to help ourselves not end up in an eviction situation.

If you haven’t subscribed to my YouTube channel, please do! You will be alerted when the next video airs.

Please let me know what other subjects you would like me to cover. I’m feeling my next playlist needs to be the entire background check. Yes or no?