When planning to move to a new rental property in Michigan under Section 8, many wonder if the program covers the first month’s rent. Section 8 doesn’t pay the full amount of the first month’s rent, but a portion. The program covers a share of residents’ monthly rent based on residents’ income and program guidelines.
So, how does the process work? We’ll know everything in this article. Let’s dive in!
Does Section 8 Cover The First Month’s Rent?
The Section 8 voucher won’t cover your complete first month’s rent. You’ll have to pay a portion of your rent from the first month of the lease.
A resident under section 8 will play only 30% to 40% of the adjusted monthly income when signing the lease. The Public Housing Authority covers the remaining amount.
However, Section 8 doesn’t cover the security deposit paid before moving into a rental property.
Overall, section 8 only covers a portion of the rent from the first month. The remaining amount and upfront costs must be paid by the residents.
How the First Month’s Rent is Covered in Section 8
Both residents and the local Public housing Authority are responsible for the first month’s rent. You need to sign a lease and pay your part of the rent. Let’s look into the details below.
Section 8 first month rent breakdown:
Renter’s Payment: After signing the lease, the residents will pay 30%-40% of their adjusted monthly income directly to the property owner for the first month’s rent.
Public Housing Authority’s (PHA) Payment: Once you’ve paid your portion, the local PHA will cover the rest of the first month’s rental amount to the landlord.
Let’s see an example:
If we calculate assuming your per-month rent for 3 room apartment is $1500, and you earn $3000 per month, then:
Monthly rent: $1500
The resident’s monthly income: $3,000
Your Contribution: $450 (30% of your per month income)
Public Housing Authority’s (PHA’s) Contribution: $1050.
The security deposit is a large amount you pay after signing the lease. Now, the question arises – does Section 8 pay a security deposit? The answer is, No!
The renters must pay the total amount of the Security Deposit directly to the landlord when signing the lease contract. Usually, Security Deposit ranges between the amount of 1.5 months of full rent.
However, it can differ as per local laws and property owner’s requirements. Luckily, this deposit is refundable if there is no damage to the property during the time of leaving.
If we calculate assuming the rent is $1500/month, the security deposit is $2250.
Other Initial Costs You Have to Carry
Apart from rent, the Section 8 voucher doesn’t cover initial costs. You must have some funds to cope with these expenses. Let’s see some common costs associated with moving into Section 8 housing.
Utility Setup Costs:
Sometimes, it becomes important to set up utilities as per family needs. Hiring an expert may charge you a couple of hundred dollars. However, if you are satisfied with the existing utility service, you may not need to spend your bucks.
Furniture and Household Essentials:
Section 8 properties are typically unfurnished. So, if you lived in a furnished rental property earlier, you must have a budget for basic furniture like beds, kitchenware, wardrobes, etc. In that case, the cost will depend on your specific needs and whether you plan to buy new or used items.
Moving Costs:
Certainly, you are responsible for carrying your household items to the rental property. Depending on how much you are moving from the last place you lived to the new one, you may need to rent a truck or hire movers.
Pet Deposit or Fees:
There are no certain fees for keeping a pet in rental properties. Some landlords won’t ask for any costs, while others may. The amount of pet deposit or fees can vary among property owners. However, HUD guidelines cap it to prevent excessive fees. There are some rules to follow for pet ownership in public housing. If you have a legal and common household pet, you may not need to worry about this rule.
When Does Section 8 Contribution to Your Rent Change?
Local public housing authorities set rent contribution limits following HUD’s Fair Market Rent. However, changes in resident’s income can lower the Section 8 voucher contribution. Let’s see these conditions in detail.
Payment Standard:
Following HUD’s Fair Market Rent (FMR), the local Public Housing Authority (PHA) set Payment Standards. It indicates the maximum amount of rent Section 8 can cover. However, if the rent exceeds the payment standard, the resident must cover the difference.
For example:
- Renter’s Monthly Earning: $3000
- Rent Amount: $2000
- Renters Primary contribution: $600 (30%)
- Payment Standard Limit: $1000
- PHA’s contribution: up to $1000
Now, the gap between the resident’s share and the rent is $1400. However, due to the payment standard limit, the PHA can only pay up to $1000. So, the renter’s extra payable amount is $400.
2. Standard Minimum Rent
All Section 8 voucher holders aren’t just low-income individuals. Aged and disabled persons without income can also get Section 8 vouchers. According to HUD’s regulations, a Section 8 voucher holder must pay a minimum rent of $25 per month. It ensures residents contribute to rent regardless of their income.
3. Income Adjustments:
Income flows can change over time. Thus, the Public Housing Authority reviews renters’ income each year to adjust their payment if needed. If a resident’s earnings increase, their rent contribution will rise as well. In such a case, Section 8 will be paying less.
4. Rental Space Changes:
Changes in rental space can significantly impact Section 8 contributions. If a resident decides to move to a new apartment or a larger unit, the Public Housing Authority will reassess the payment standards based on the rental amount. In that case, the Section 8 contribution may be reduced.
Common Misconceptions About Section 8
There are a lot of misconceptions that need to be clarified among landlords and renters about Section 8. Read this section to find out if you have heard any rumors regarding Section 8.
Only Low-Income Families Can Apply.
According to the US Department of Housing and Urban Development and MSHDA, a PHA must provide 75 percent of its voucher to applicants whose incomes do not exceed 30 percent of the area median income. Applicants with incomes at or below 50% of the area median income can also apply for the voucher.
It means that families with moderate incomes are eligible for Section 8 vouchers. However, they typically have a lower chance of approval since public housing authorities (PHA) prioritize low-income families.
All landlords accept Section 8.
According to the Fair Housing Act, a landlord cannot discriminate against Section 8 voucher holders. But that does not mean the property owner must accept that renter. The home also needs to qualify for the program.Many property owners choose to participate in the Section 8 voucher program, while others may not.
The voucher guarantees housing.
The Section 8 voucher program provides financial assistance. However, it does not guarantee a place to live. Residents still need to find a landlord willing to accept the voucher program. In most areas, securing a house isn’t that difficult, but sometimes it can be challenging in big cities, especially in tight rental markets.
Section 8 Payments Are Delayed.
Generally, PHAs process payments as fast as possible and then send them directly to landlords at the beginning of every month. So, delays aren’t that common, but they can happen occasionally.
Section 8 Benefits Are Permanent.
The rent payment of Section 8 housing is based entirely on the resident’s adjusted income, and only eligible individuals can get the voucher. Although the Public Housing Authority (PHA) reviews each resident’s status yearly, residents are still responsible for informing the PHA if their income changes.
Only Families with Children Can Get Section 8.
Section 8 voucher program is not limited to families with children. It also provides financial help for low-income seniors, individuals, and disabled persons. Here, the resident’s income is the key factor. To qualify for this voucher, a person’s or a family’s income must be below a moderate level.
To Sum Up
Section 8 only pays the gap between the resident’s adjusted monthly income and total rental amount until it exceeds payment standards. It helps pay only a part of the first month’s rent, not the full rent.
In addition, upfront costs that usually arise in the first month (such as security deposit, pet deposit, moving cost, etc.) are not covered by Section 8. Feel free to contact AmeriHome if you hold the voucher, want to learn more about the section, or are looking for a favorable accommodation.
Frequently Asked Questions
Does Section 8 Pay for Mobile Homes?
Yes, Section 8 vouchers can be used for mobile homes. However, mobile homes must meet HUD’s health and safety standards. Thus, the Local Public Housing Authority (PHA) will inspect the property to ensure if it qualifies or not.
Does Section 8 cover RV Space?
Yes, section 8 can sometimes cover RV space rent if it qualifies HUD’s housing quality standards. However, it’s rare, as it is quite challenging for RVs to fulfill. So, before planning to move an RV space, it’s best to contact the local PHA, as policies can vary in different areas and some may not allow Section 8 vouchers for RVs at all.
How to Report Section 8 Housing Violations?
To report any type of Section 8 housing violation, it’s better to contact the Department of Housing and Urban Development’s (HUD) office. You can file a complaint online, send a mail, or call the HUD Office of Inspector General directly. Before doing so, gather important information like photos or documents that support your claim.
