The notion of accepting tenants with a Housing Choice Voucher may seem complex or confusing to some landlords. While there is a necessary process to go through along with some downsides, accepting Section 8 tenants comes with a list of benefits too. As affordable housing becoming harder and harder to find, expanding your tenant pool may be a worthwhile move for rental investors. To help landlords better understand the process, laws, and benefits of Section 8 in Maryland, continue reading below.
What is Section 8 in Maryland?
Most landlords are familiar with the term “Section 8,” which is now commonly known as the Housing Choice Voucher Program. This is a federally funded program overseen by the U.S. Department of Housing and Urban Development subsidizes rent for qualified individuals and families. Thus, helping participants secure safe and suitable rental homes in the private market. In Maryland, program participants must apply to the program, complete necessary paperwork, and meet certain income requirements.
How Can Landlords Participate in Section 8 in Maryland?
Listing your property through Section 8 in Maryland is a great opportunity for landlords to help their community and reach a larger tenant pool. That said, working with a Housing Choice Voucher Program requires some added steps and paperwork along the way. Let’s review the steps a Harford County landlord must follow to successfully participate below.
- List the property using the Available Property List form on the HCHCD website, register your property on the free site mdhousingsearch.org, or advertise “Housing Choice Voucher OK” in the local newspapers.
- Interview, complete showings, and screen interested tenants based on your standard qualifications.
- After selecting a tenant, complete the owner forms that the tenant has in their possession. The required forms include Request for Tenancy Approval, Smoke Detector Certification, Lead Warning Statement, and Landlord Certification.
- The tenant applicant submits all completed forms to HCHCD.
- After review, program officials determine the rent is reasonable, and the applicant’s portion is less than 40% of their gross monthly adjusted income, the application will progress. Then, a Housing Quality Standards inspection appointment will be set up with the landlord.
- Presuming the unit passes inspection, a lease effective date will be set. Even though partial payment comes from the housing program, the lease is signed between the owner and tenant. The owner and agency sign a Housing Assistance Payment Contract. Afterward, the housing agency must receive a copy of the signed lease and housing contract.
- New owners must complete and submit financial documents to receive rent payments, including a W-9 and Direct Deposit forms.
- Schedule move-in day details and exchange keys to the unit, and perform any move-in processes such as a condition inspection.
Section 8 in Maryland – Who is Responsible for What?
In any rental transaction, each party is responsible for certain tasks under the law and the lease. This is no different when adding a Housing Program to the mix. However, having an additional party means all three entities have some responsibilities that are vital to the success of the tenancy. Let’s review these further below –
Landlord Responsibilities in the Housing Choice Voucher Program
- Thoroughly screening tenants
- Selecting the applicant based on a Fair Housing compliant set of qualifications
- Performing all management and renting functions
- Complete all necessary maintenance
- Comply with all terms of the Housing Assistance Payment Voucher Contract as well as with the lease
Tenant Responsibilities in the Housing Choice Voucher Program
- Tenants must find suitable housing options
- Provide HCHCD with all income or family information needed to verify and certify program eligibility
- Continue to provide financial documents on an annual basis to maintain eligibility.
- Allow the landlord and HCHCD to inspect the unit when requested
- Reimburse landlords for any damage they caused to the unit
- Adhere to all obligations under the lease and the Housing Choice Voucher program
Agency Responsibilities in the Housing Choice Voucher Program
- Review and process requests for certification and re-certification
- Determine the amount of approved rental assistance
- Inspect eligible rental units
- Approve lease documents and execute the Housing Assistance Payment Contract
- Make payments to the landlord on behalf of the tenant
- Monitor the program and program participants to ensure everyone involved complies with Federal, State, and Local regulations.
Common Questions Regarding Section 8 in Maryland
- Are landlords required to lease to anyone with a housing voucher? – Depending on your property’s location, the answer may be yes or no. For example, in Baltimore City, landlords cannot discriminate against tenants based on their income source, including housing vouchers. However, in Harford County, landlords have the ability to rent to whoever they please. That said, landlords in any area cannot discriminate based on the Fair Housing protected classes.
- Does a Housing Agency pre-screen applicants? – As part of the program screening process, applicants go through income verification and a criminal background check. That said, this should not take the place of a landlord’s own screening system. Keep in mind, the application and screening process you implement must be the same for all tenants, whether they have a voucher or not.
- How long does it take to receive payment from the Housing Agency? – Processing time for the initial payment may take up to 14 business days. However, all subsequent payments come around the 1st of the month.
- Does the Housing Agency pay the security deposit? – Tenants must pay their own security deposit. In some cases, other local programs may offer tenant deposit assistance, but this is generally the tenant’s responsibility. Additionally, landlords are not allowed to charge additional deposits because the tenant is a voucher holder.
- Should voucher applicants receive any special treatment from landlords? – Whether a tenant receives assistance or not, landlords must treat every applicant the same to comply with Fair Housing standards.
What is Fair Housing Discrimination?
The Fair Housing Act is a federal, state, and local set of guidelines that protect an individual’s right to fair housing choice. Therefore, it is illegal for any landlord to discriminate against applicants based on protected classes. Keep in mind; these protected classes may vary from location to location. So, landlords must research laws in their local area before implementing any screening policies.
Protected Classes Under the Federal Fair Housing Act
- National Origin
- Familial Status
Additional Classes Under Maryland Law
- Marital Status
- Sexual Orientation
- Gender Identity
The best way to avoid costly discrimination claims is to treat all applicants respectfully and hold everyone to the same set of standards. This is not only a professional way to do business, but it is also the only legal way to succeed.
The Benefits and Disadvantages of Section 8 in Maryland
Like every decision landlords make, there are good points and inherent disadvantages. Therefore, deciding whether to accept applicants with a Housing Choice Voucher is no different. However, to help property owners better understand how the program could work for them, check out the most common benefits and drawbacks below.
5 Benefits of Accepting Section 8 in Maryland
- Timely Rent Payments – The Department of Housing guarantees a portion of the rent and therefore pays on time. In addition, tenants are incentivized to pay on time, so they do not incur late fees or risk losing their assistance for not complying with the lease obligations.
- More Potential Tenants – More potential applicants mean greater opportunity to rent the home quicker and find the best fit. Section 8 in Maryland offers landlords additional advertising outlets, and since it is hard to come by in many areas, these homes are often in high demand.
- Financial Reassurance – If a tenant loses their job, landlords are out of luck most of the time. However, with a voucher tenant, the program may further assist them in paying the rent during their financial hardship. This helps keep the tenant in place and the landlord receiving payment as agreed.
- Added Accountability – In addition to your own efforts to enforce lease terms, the Housing Authority also holds tenants accountable. So, if a tenant is unruly, causes damage, or gets complaints from neighbors, the Housing Authority may assist the landlord in warning or disciplining the tenant up to possible eviction. Thus, adding an extra layer of protection for owners.
- Helping Your Community – Accepting Section 8 in Maryland promotes opportunities for those truly in need. As a landlord, you are helping your local community member by offering a fresh start that can dramatically impact someone’s life.
The Cons of Accepting Section 8 in Maryland
- Potentially Lower Rates – The Housing Agency covers a large portion of the rent and therefore has input on the total amount. So, if the program feels the unit is overpriced, HUD may ask owners to lower the rent, or they have a right to disapprove your property based on this condition.
- Differing Housing Programs – In some locations, housing offices are helpful and understanding. However, not all agencies are created equal, and some can be slow and uncooperative. Thus, if something goes wrong, landlords are at the mercy of a government employee who, in many situations, sides with the tenant.
- Annual Inspections – Section 8 in Maryland requires the property to pass an initial inspection. That said, inspections are also conducted on an annual basis. When issues are found, landlords have a short window to make repairs which can prove difficult for some owners.
- Government Terms and Contracts – A Housing Authority Contract can restrict or significantly limit an owner’s authority and rights as a landlord. This means that the relationship is no longer just between the landlord and tenant but a third party as well. This can slow down decisions and be a hindrance to productive communication for some property owners.
Making the Most of Section 8 in Maryland
In Maryland, many programs assist eligible applicants in finding safe and suitable housing. As a landlord in Harford County, you have a choice on whether or not to accept voucher applicants. However, there are many benefits to doing so. One of the main things that hold property owners back is the added paperwork, inspections, and communication needed to process an application through the Housing Program.
Bay Property Management Group understands these concerns, and our team can help! The local property managers at BMG are well-versed in the specific requirements of housing programs and can complete the necessary steps on the owner’s behalf. This, along with our own legal leasing documents, can help owners feel secure in their decision to expand their potential renter pool to include assistance programs. So, if you have questions about housing programs in your area or how you can limit vacancy in your rental, give us a call today.