Section 8
The Section 8 existing Housing program works to provide over 3,500 units of rental assistance, through the HUD Section 8 Rental Certificates, Housing Choice Vouchers, and Moderate Rehabilitation programs, on behalf of very low income families and the elderly to ensure they have decent, safe, and sanitary housing. The program operates on a first come, first serve basis statewide, through a network of local agents the department contracts with for administration of the program. The program makes a subsidy payment to the property owner on behalf of the tenant. Payments are based on applicable unit rent limits and tenants generally pay 30% of their income towards rent and utilities. In 2000, the Section 8 Housing Program competed in a national RFP to become the contract agency for the HUD Section 8 Project Based Assistance Program in Montana. The Section 8 Program will perform functions previously performed by HUD in administration of this program, which provides over 4,400 units of rental housing in 128 projects, for low income and elderly families in the state.
Project Based Section 8
The Project Based Section 8 agency is the contract administrator for properties that HUD manages throughout the state. They provide rental assistance to the projects instead of the tenants. Landlords perform administrative tasks at the local level. The agency will do the property reviews, property management, and make payments to owners. The agency earns fees from HUD for the tasks performed using tenant data and rent and payment structure. Each month the project sends in a voucher to request money for the tenants in the project (Housing Assistance Payment requests). The Project Based Program renews contracts as they expire. Program specialists do special damage claims, annual rent increases, respond to emergencies, check compliance for fair housing and waiting lists, on-site management reviews, follow-up to physical inspections, review of management decisions, and budget assistance.
Tenant Based Section 8
Tenant Based Section 8 provides rental assistance to families at or below 50% of median income is under an ACC contract with HUD. Assistance is tied to the tenant, which allows tenants a right to move anywhere in the US, and take the assistance with them to another rental. Applicants are put on a waiting list as a first come-first serve basis. Income targeting requires that 75% of new participants earn below 30% of median income. Section 8 contracts with local Field agents to provide local intake and Housing Quality Standards (HQS) dwelling inspections. Program Specialists review work performed by the field agents, make program decisions and determinations, conduct quality control reviews of local inspectors and tenant files in the field, train local agents, and enter data on the HAPPY database system for participant tracking and preparation of rent housing assistance payment (HAP) checks.
Housing Choice Vouchers are given to eligible applicants authorizing Section 8 rental assistance. The voucher stays with the applicant who finds a rental unit on the open market that is HQS inspected. Once a lease is signed, the applicant becomes a participant. The landlord is allowed to charge up to whatever is customary in the local area for a security deposit, therefore, the landlord cannot receive damage claims from Section 8.
Rent is limited by Rent reasonableness which compares like units in the community to insure that Section 8 does not pay more for rent than unassisted similar units. A Payment Standard is set between 90-110% of HUD Fair Market Rent (FMR) and includes utilities, except phone. The FMR is set at the 40th percentile rent, which is the bottom 40 out of every 100 rentals price-wise on the market. Tenants normally pay 30% of their income for rent. With vouchers, if a tenant rents above the Payment Standard, they pay 30% of income plus rent above the standard. However, no one can start a lease where they pay more than 40% of income for rent.
A HAP contract is signed with the landlord for as long as the tenant is in the unit and it meets HQS standards. Portability means that a voucher tenant is eligible to move anywhere in the United States after one year.
Moderate Rehabilitation (Mod Rehab)
Assistance is tied to a rental unit that is under a long-term contract with HUD. The tenant pays 30% of income for rent and a $50 deposit. Landlords are eligible to file damage claims if a tenant damages a rental unit.
Section 8 Single Room Occupancy (SRO) Moderate Rehabilitation Program for Homeless Individuals
This program provides rental assistance for homeless individuals in rehabilitated SRO housing. The Section 8 assistance is provided in the form of rental assistance payments. These payments equal the rent for the unit, including utilities, minus the portion of the rent payable by the tenant under the U.S. Housing Act of 1937. Rehabilitation must involve a minimum expenditure of $3,000 per unit, including its prorated share of work to be accomplished on common areas or systems, to upgrade to decent, safe, and sanitary condition to comply with the Housing Quality Standards. The maximum expenditure allowed per unit is $15,900. Private nonprofit organizations, Indian Housing Authorities (IHA), and Public Housing Authorities (PHA) are the only eligible applicants. Private non profits must subcontract with PHAs to administer the rental assistance. Contact person: Dave Jacobs, Office of community Planning and Development, HUD-Denber (303) 672-5420.
Low Income Housing Tax Credit Program
The low income housing tax credit, established by Congress in the Tax Reform Act of 1986, is intended to provide for the retention, rehabilitation and construction of low income rental housing. Through the program, developers and owners of qualified housing receive an annual federal tax credit for 10 years, based on the number of housing units provided to low income individuals and families. The Montana Board of Housing receives authority to allocate the credit through the Internal Revenue Code, based on $1.25 per capita per year. Staff monitors projects to ensure low-income tenant and rent restrictions are met. Any non-compliance issues are reported to the IRS.
