Section 8 issue - advice needed

I received the following note from my property manager regarding a property I have rented to a Sec. 8 tenant starting Oct. 1st. Rental rate agreed is $975/month. Property is in Texas.

Note from property manager:
The tenant of (house address) Sec. 8 ‘s voucher is only $ 726.00 which means the sec. 8 pays for her this amount. She is willing to pay the difference of $ 249.00 a month from her own pocket without the knowledge of sec. 8. Just let you know if Sec. 8 personnel find out about this, they will cut off her entire benefit. Is it O.K with you?

What do you advise? This is my first Sec. 8 tenant. I thought I read somewhere that tenants could pay the difference, but perhaps I am mistaken…

Thanks, Corey

No, it’s NOT OK…why would you think that the Section 8 folks would have a problem with it??? It’s agianst the rules.


Section 8 allows the tenant to pay only a certain percentage of their income toward rent hence the cap on what they can pay. I know investors that allow the tenants to pay more than that but from what I understand if section 8 finds out they will lose their benefits and the landlord will no longer be able to receive section 8 funds.

Thanks for your replies. I sent a follow-up to the property management company saying no I didn’t want to proceed and it seems that they also had already notified Housing Authority and let them know that we are not accepting that voucher….

Time to find another tenant I guess…

Better to be honest and lose one than to be dishonest and lose all eligibilty!

Play by the rules…it’ll come back to you!


The rules/regs on this are clearly outlined on the hud website for section 8. It is usually the case where sec 8 pays only a portion, not all of the rent. The portion contributed by the tenant cannot exceed the FMR for that area. They will, in rare circumstances, allow a tenant to pay more out of pocket bringing the total rent above the areas FMR provided they approve in advance.

It is very rare since the way they see it is…if the client can afford to fork over an extra 200 bucks then are they really in need of housing assistance in the first place???

Someone mentioned something about FMR. What is an FMR?

On the left side of page there is a full list of investing abbreviations under invester information. This list will very helpful while reading these posts.

lansing rei


Well section 8 around here only allows 30% of income to be used for housing. However people that aren’t on section 8 sometimes go to up 50% of their income for housing which is why people complain that there’s a lack of affordable housing in this state.

With that in mind, it’s not too strange that a tenant can fork over an extra $200, they’d just be exceeding that 30% guideline as other people who aren’t receiving section 8 are doing.

Do you folks find that going with section 8 is a safer bet in lower income neighborhoods?

Woodman, to answer your question…yes. Sadly enough, the low income areas are usually the most run down and are not exactly sought after by tenants. FMR’s will be substantially higher than market rents there so sec 8 is the only way to go. The way I see it…the best cash flows are in these areas. Most investors are scared to buy properties in the area so inventory is high and pricing is much lower yet sec 8 allows you to correct a nice rent. Draw backs are on the appreciation side and higher tenant headaches.

Henryinma, I’m not sure I understand your response. Are you saying that in Mass it is not uncommon for NON sec 8 tenants to pay upwards of 50% of their income for rent? I’m sure that might be the case in central Mass but it is not usually the case in western Mass. Income levels are comparable between our areas however housing is substantially higher around you.

To clarify the sec 8 regs…the tenants portion of rent+utilities must be at least 30% but no higher than 40% of their AGI. With that being said, a tenant cannot fork over more that 40% without prior approval which is very unusual.


FMR is not in the glossary or at least not that I can find. I am assuming that FMR stands for fair market rent. By federal regulation, Section 8 payments can not exceed the 40th percentile of fair market rents for the area, which means that Section 8 rents are below average.



FMR is in the “Investing Abbreviations”:

FMR - Fair Market Rent


I’m more in the Boston areas and the rents in this area are much higher such that people could be paying $1500-$2500 for rent depending on the areas they’re in. As their incomes are much higher, it’s not that big a stretch for them to be paying up to 50% of their income in rent as the price of gas and food remains the same no matter what income level.

One thing people seem to miss is that Section 8 does their annual inspections and it takes a while to follow up on their their inspection items. I’ve had one building where I haven’t had section 8 tentants in a long time and another where I have those section 8. In one area I have no problems getting market rate tenants because it’s in a good location and I’d always get 10-15 people per week who would come and look at the place. In the other, section 8 does pay a little bit more than market rate tentants so I put up with the headaches.

The clear choice is really getting market rate tenants if you own an older building. They’ve made me do things like paint the floor, patch a couple of holes in the hallway, put in regular carbon monoxide detectors because dual carbon/fire alarms don’t meet state code anymore, repoint the foundation, replace windows, put in handrails, fix a loose step, put a lock on a bathroom door, etc.

Don’t get me wrong, I would have done all that eventually, but once the inspector comes out, they give you 30 days to fix it all because if it’s not, you don’t get the rent checks anymore. You can sometimes get an extention but you’re still doing a lot of running around.

i let a tenant pay a little more that what was agreed. The rent was 800, SEC8 was paying 650 and her share was 100$ so i had to collect the extra 50 on the side.

With a SEC 8 tenant, and no written agreement for that $50, how many times do you think I collected that?? Its not like I could evict her