Clients who receive Section 8 vouchers find their own rental housing and use the vouchers they receive from their housing agency to help pay the rent. Basically, the voucher means that the Federal Government will pay a specific amount of the rent.
If you wish to rent to Section 8 Voucher holders, you should inform the Housing Authority of the availability of your property and also indicate in your advertising that you welcome Section 8 Voucher holders. Ultimately, it is the voucher holder’s decision whether or not to rent your property. Of course, as the landlord, you would screen the Section 8 voucher holder just as you would any other prospective tenant.
HQS Housing Standards
The U.S. Department of Housing and Urban Development (HUD) sets physical standards for housing receiving federal assistance. The primary standards are the Housing Quality Standards (HQS) at 24 CFR 982.401. All housing funded through HUD’s Housing Choice Vouchers (formerly known as Tenant-Based Section 8 Voucher) must comply with HQS as a condition of receiving funding. Local public housing authorities conduct initial and annual inspections to ensure compliance with HQS.
Fair Market Rents (FMRs) are primarily used to determine payment standard amounts for the Housing Choice Voucher program, to determine initial renewal rents for some expiring project-based Section 8 contracts, to determine initial rents for housing assistance payment (HAP) contracts in the Moderate Rehabilitation Single Room Occupancy program (Mod Rehab), and to serve as a rent ceiling in the HOME rental assistance program. The U.S. Department of Housing and Urban Development (HUD) annually estimates FMRs for 530 metropolitan areas and 2,045 nonmetropolitan county FMR areas. By law the final FMRs for use in any fiscal year must be published and available for use at the start of that fiscal year, on October 1.
FMRs are gross rent estimates. They include the shelter rent plus the cost of all tenant-paid utilities, except telephones, cable or satellite television service, and internet service. HUD sets FMRs to assure that a sufficient supply of rental housing is available to program participants. To accomplish this objective, FMRs must be both high enough to permit a selection of units and neighborhoods and low enough to serve as many low-income families as possible. The level at which FMRs are set is expressed as a percentile point within the rent distribution of standard-quality rental housing units. The current definition used is the 40th percentile rent, the dollar amount below which 40 percent of the standard-quality rental housing units are rented. The 40th percentile rent is drawn from the distribution of rents of all units occupied by recent movers (renter households who moved to their present residence within the past 15 months). HUD is required to ensure that FMRs exclude non-market rental housing in their computation. Therefore, HUD excludes all units falling below a specified rent level determined from public housing rents in HUD’s program databases as likely to be either assisted housing or otherwise at a below-market rent, and units less than two years old.
HUD defines FMR areas as metropolitan areas and non-metropolitan counties. With a few exceptions, the most current Office of Management and Budget (OMB) definitions of metropolitan areas are used. HUD uses the OMB definitions because of the generally close correspondence between them and housing market areas. FMRs are intended to be housing market-wide rent estimates that provide housing opportunities throughout the geographic area in which rental units are in direct competition. Exceptions include a small number of metropolitan areas whose revised OMB definitions encompass areas that are larger than HUD’s definitions of housing market areas. These exception areas are denoted as “HUD Metro Fair Market Rent Areas,” (HMFAs).
HUD uses similar procedures to calculate FMRs, whether they are based on decennial Census data, American Community Survey (ACS) Data, or Random Digital Dialing (RDD) surveys. The main difference is in the way base year FMR estimates are developed from each of the sources of survey data. The procedures used to calculate FMRs and the differences in the base year estimates are explained below. Figures 1 and 2 provide flow charts for the evolution of the FMR calculation process.
Beginning with the FY 2005 FMR publication, HUD developed and maintains a web-based “FMR Documentation System.” For any area of the country selected by the user, the documentation system provides a page containing a summary of how the selected years’ FMRs were derived starting with the 2000 Census benchmark and including any subsequent re-benchmarking using local RDD, American Housing Survey (AHS) or ACS data. The tables on the summary page include links that provide complete details on how the data was developed. HUD publishes a version of the documentation system to coincide with each publication of FMRs in the Federal Register. Examples of the calculation process can be found in exhaustive detail using the FMR documentation systems maintained by the Department. Please see the following website (http://www.huduser.org/datasets/fmr.html) and select the FMR Documentation System for the year in which you are interested.
With the release of 2000 decennial Census information, Fiscal Year (FY) 2005 FMRs were “re-benchmarked” to incorporate all 2000 Census information into the FMR creation process. This re-benchmarking was accomplished by computing 2000 Census 40th percentile base rents. For FY2005, FY2006 and FY2007 FMRs, annual updating between 2001 and 2004 used local Consumer Price Index (CPI) data, RDD results, or Regional RDD results as appropriate.
Beginning in FY 2008, change factors detailing the change in rents from the 2000 Census to the current ACS data year (for FY 2008 this is 2005) were employed to update rents from 2000 to the current ACS data year. From the ACS year, local or regional CPI information is used to further update the rent estimates. From the latest CPI information (for FY 2008, this was 2006) to the midpoint of the FY for which the FMRs are being calculated, a national trend factor is applied.