How to Interview a Section 8 Voucher Holder -- Does their Voucher Cover the Rent?
/It never ceases to amaze me that a Section 8 voucher holder will ask to rent a house that their voucher will not cover. Why is that?
THE PROCESS
The caseworkers sometimes give them scenarios stating that they can afford a house for example for $1,100 rent if the tenant pays for all of the utilities. If the tenant only pays for gas and electric and the landlord pays for the water, then they can afford a house at $1,150. Meanwhile, their voucher amount is actually $1,371.
WHAT REally HAPPENS
The voucher holder will see their voucher and see that it is for $1,371 and they will start calling on every property they can find for $1,300. The owner of the property will take the application, run it, qualify the tenant, stop showing the house, take the move packet from the tenant, fill out the move packet, and email it to Section 8. A week or two later the caseworker will email the owner and state that this tenant can only afford some random amount of $1,109 and will you accept that? When the landlord asks the caseworker why the tenant thought they could apply for a $1,300/month house, the caseworker will say they told the tenant they could not and it’s not their fault. If they even answer you!
What about the HUD standard amounts?
The Housing and Urban Development office has a maximum amount of rent the Section 8 offices will pay. Look here. In Wayne County, Michigan, where Detroit is, I know the maximum amount of rent I can receive for a 3-bedroom voucher is $1,371. When I turn in the move packet with all of the information about my house, the caseworker is required to run a comparison of other rentals to make sure what I’m asking for is a reasonable rental rate according to the community where my house is.
There is a process to appeal it if I disagree with them. My rents are typically on the higher end because my houses are better than our competition. I will ask the caseworker for the appeal form that the Michigan State Housing Development Authority has. Not all of the offices will accept the appeal. I always win on the appeals!
What I Understand That Leads to the Questions I will Ask.
I know in Detroit the maximum amount of rent that can be paid is $1,371 for a 3-bedroom voucher. I know that Detroit Housing Commission, although slow and hard to work with, will pay up to around $1,300 with the tenant paying all the gas, electric, and water. I know Plymouth Housing Commission rarely pays much over $1,000 for the same family size and resultant bedroom size. The rest of our local housing commissions are in them middle somewhere. I know if a tenant works, there is a window of how much rent a tenant can afford that is somewhere between 30% to 40% of their income. And I know if a tenant does not work, that Section 8 will make them pay only 30% of their income (child support, disability, public assistance). I also know the number of children determines the number of the bedroom voucher the tenant is granted. Two to three children or people on their voucher will usually be a 3-bedroom voucher. HUD has rules about same sex children sharing bedrooms. I believe opposite sex children can share bedrooms up to the age of 10. The more children, the higher a bedroom size voucher they are allowed. But Detroit has very few homes with more than three bedrooms so I will get calls from people who have multiple same sex children allowed in one room so the voucher holder is asking for a 3-bedroom house although she qualifies for a 5-bedroom house. If they have a larger than $1,300 rental limit, I can assume they have multiple children or people on their voucher.
The Questions
Are you new to the voucher? If they are not, please see the questions below I ask the experienced voucher holders.
Tell me about your voucher. I’m purposely open-ended to see how much they already know. If they ask for clarification, I will ask from which housing commission it is so I have an idea if they can afford my rent. (See paragraph above).
How much is your voucher? I want to ask them how much rent can they afford, but they don't seem to understand it when I ask that. Or they answer definitively and they are wrong.
Great. So is that the amount with you paying the utilities or the landlord paying the utilities? They will say “It says with utilties.” And I will say, “With WHO paying the utilities?” They don’t know.
Who all is on your voucher? I don’t like to ask about children because I don’t want to violate the Fair Housing law that protects familial status. And it isn’t about children anyway. They may have other adults on the voucher. I do want to know too the ages of the people on the voucher because if they’re almost 18, they could graduate off the voucher and then I’m stuck with someone who maybe doesn’t work and won’t be able to pay her own rent once she’s not receiving as much public assistance. If the other people on the voucher are adults, they sometimes have disability income which can be nice for me to know they have other income. Besides that, if there are more than two or three extra people on the voucher, then the voucher size increases and it makes it really hard for me to tell if the amount is with them paying utilities or me paying the utilities. If the amount is high and it’s only two to three extra people with them on their voucher, then I can assume the high amount of rent is pre-utiltiy removal that gets to the actual amount of rent the applicant should be shopping for.
My $200 Rule
In the scenario where I have a 3-bedroom house listed for rent at $1,100 and someone says they have a $1,300 voucher and I ask how many people on their voucher and they say it’s two or three extra people, then I can pretty safely assume they can afford a $1,100 house. The other $200 is if the tenant has to pay all their own utilties.
Side note: Why does Section 8 send their voucher holders off into the wide world with an amount for a property where the landlord pays ALL THE UTILITIES? What landlord pays ALL THE UTILiTIES? I don’t know of any single family homes where that happens.
It Might Be Worth Asking This Too…
Do you have anything in your paperwork that shows different scenarios? When I ask the Section 8 offices why thier voucher holders never know the rental amount they can shop for and they think their voucher amount is their rental amount, I’m told they DO know the rental amount. It’s all in their paperwork. I’ve tried multiple times to get the applicants to read these scenarios to me that they are given. Sometimes that works. But usually the voucher holder isn’t able to decipher the scenarios because the scenarios only say “with utilities” but never “with tenant paying utilities.”
If All Else Fails, This May Work…
Within that phone call, I can tell if I want to rent to the applicant or not. I don’t want to spend my time researching their application to find out if they are qualified only to find out the voucher amount was so wrong and they could never afford my house. Here’s a video I made of how I qualify tenants. My kids say I’m never to have bangs again!
I will ask the applicant, before I even receive an application if they have their caseworker’s email address. They usually do.
I email the caseworker and let the caseworker know that the applicant is not able to decipher what general rental amount she can afford. I word the email like this (adding bold sentences so you see why it works!):
Hi Ms. Green,
I hate to charge someone an application fee and do the whole process only to find out later that her voucher wasn't going to cover the house anyway. So when in doubt, I've been asking!
18465 Mansfield, Detroit
1009 square feet
2 bedrooms
1 full bath
rent: $950
SD: $950
Includes:
Private entry
basement
fenced yard
garage
Washer/dryer hookups
Tenant Pays:
Gas
Electric
Water
Pest control
Tenant Supplies:
Refrigerator
Stove
Please let me know if you have any questions. I understand you’re not able to give me an exact amount, but can you tell me if it’s worth the application fee to go forward with this application?
Thank you so much,
Monique Burns
I used to send this email and not mention that I’m saving the tenant the money on the application fee, and the caseworkers would write back and tell me the only way for them to answer that is if I fill in the move packet. That just isn’t true. They can answer this, they just don’t want to. Saying I’m saving the tenant from another unnecessary application fee is what seems to appeal to the caseworkers the best.
How I Interview Voucher Holders who are Not New to Using Their Voucher
Are you currently using your voucher to rent another place? First of all, I want to know if they are renting somewhere so I can see how they live before they come to my house. See my video about how I do that here:
Oh, you are? Great. Tell me about your voucher. How much is the rent and how much of that are you paying? My hope is that the current rent and my rent aren’t too terribly apart. If they are, then I need to know why. Then I can ask how long they’ve been there. Some landlords don’t know about the payment standards and they aren’t asking Section 8 to raise the rents. It’s hard to know. It could just be a lazy property manager too.
Are you paying the utilities or does your landlord? If the landlord is paying the water and I will not, then I know the difference is around $60/month. If I do the voucher where I pay the water, I have heard it works out in my favor over time. But I worry about a tenant running a car wash one month or something crazy so I just never pay the water. It’s extra bookkeeping too. And Detroit has a wonderful program where they will put the water in the tenant’s name and when the tenant moves, the water bill goes with the tenant, not with the property. It’s a state law that only the city of Detroit honors.
It’s not a Science!
These questions I’ve learned to ask have rarely burned me. I do still get burned sometimes though when I’ve taken the house off the market and submitted the move packet and got stuck waiting 1-2 weeks only to learn that the applicant has no way of affording my property. Some of the applicants are slick. They know how to breeze by that part and hope you will accept far less rent because you just lost those weeks of not showing the house anyway. That lost rent is the same difference. Time is money. A vacant property costs us money. I did make this video about how I reduce my vacancy time.
Thanks for reading all the way to the end. If you have any questions or if you want to invest in Detroit properties, please let me know! Monique@greatdaypm.com