In most states, the Housing Choice Voucher Section 8 Program will not pay the security deposit on a home or apartment selected by the family. This can present challenges for the potential tenant as coming up with the funds to pay that expense, as well as the first or last month’s rent, is often difficult. While not all landlords will in fact change a security deposit, they do have the right to do that. When a deposit is in fact due, the number of assistance programs and agencies that can help renters is limited, but there are some options to explore for receiving this form of financial support.
If you are moving into a home that is subsidized by the federal government and the Housing and Urban Development Section 8 rental assistance program, be aware of the following. First note that there are a few different types of programs for different housing units or apartments, and they include Portable Vouchers and Project Based, among others. The rules around security deposits, and the availability to any financial assistance for paying them, can very based on the type of home.
Landlords, whether private individuals or larger corporate apartment managers, who rent out homes using Section 8 leases need to follow all of the laws of that particular state. There are no exceptions or special programs that were put into place by HUD or a local public housing authority.
In general, a case manager from a public housing authority (PHA) or maybe a pro-bono law firm can provide information and other assistance to income qualified individuals on understanding the law. They may also have referrals to non-profits that have short term loans, funding or cash grants for paying a portion of the deposit.
Since all state laws need to be followed, if the landlord does charge the tenant a security deposit, they need to give the renter a written receipt of the transaction. They also need to take those funds and place the money into a separate bank, or escrow, account. Statements should be provided by the landlord to help the renter understand how much was deposited into escrow, how much the interest will be, and address other financial terms of the transaction.
In addition to those steps, the landlord needs to also pay the tenant a fair, market interest rate their portion of the security deposit. There could also be some restrictions set by the state or the federal government as to how much money the landlord can request from the tenant for the home. A key factor to that will be the type of Section 8 assistance that an applicant has.
One type is what is known as Portable Vouchers. Other common names given to this may be Housing Choice, mobile, or tenant-based. The rule when it comes to paying security deposits for all these will be the same. For tenants that are part of this HUD rental assistance program, the landlord may charge a security deposit up to a maximum amount of one full month's rent.
Deposits on Project-Based Housing Vouchers is the HUD sponsored program that means that someone can’t move from one apartment or home to another. While the amount can vary by state or changes to federal law, in general the landlord may ask for a security deposit of only $50. Or that amount requested to be paid can be your share of the monthly rent payment, up to 30% of income.
Be aware that there have been some reported cases in which landlords try to collect the full monthly rent as a security deposit as part of the project-based Section 8 program. Note they can’t do that and it is illegal, with one exception being if you join the section 8 program after having already lived in that same, existing apartment.
When it comes to collecting the last month’s rent on a lease, HUD and the Housing Choice Voucher program does not address this. It can also be hard to find help from non-profits for paying this cost. However the tenant should only pay their portion (so say 30% of income) and not the entire balance. The Section 8 housing agency in your state will pay the rest when due.
When you are leaving the home and it comes to retrieving the security deposit from the landlord, if there is property damage or unpaid rent, a landlord can do a few things. They can sue you. Or they can apply some or all of the security deposit to those expenses. Or they can approach the housing authority and request a payment for the damages. Note that any of these steps could prevent the individual from using the housing choice voucher program in the future.
That provides a little background on the process. For those individuals who need help with paying the expense, they do have a few options to explore. However the number of agencies that tend to offer help is very limited.
The first step may be to ask the housing authority for referrals. Sometimes staff from the centers know of local charities, non-profits, or government programs.
After that, try contacting some non-profit agencies in your own. There are cases in which community action agencies may have limited funding to help pay for a portion of security deposit. Or they may take part in annual federal government grant programs that disburse funding for this, such as homeless prevention or rapid rehousing. Click community action agency locations.
There are several other options to explore, such as local churches, charities such as the Salvation Army or Volunteers of America, and others. Due to funding constraints, these smaller organizations may provide individuals with a loan to be used for paying the deposit. These agencies are located across the nation though and there are different programs to try. Read more.
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