One vacant unit, an owner who wants to try vouchers, me holding the paperwork

Dumb question because I'm brand new. Does the government pay the whole rent, or does the tenant still pay part of it? I had assumed the whole thing and now this thread is making me think I was wrong.

She's not getting 1,720. The authority runs a rent reasonableness check against unassisted comps in the same submarket, and your own listing at 1,595 sitting five weeks is going to be sitting right there in the file. I had a 3 bed where the standard was well above what I got approved and the comp determination came back within twenty dollars of what the house down the street rented for. Set her expectation now, before you submit anything, or you'll be the one who told her 1,720.

Two mechanics decide your number, and pike has one of them right.

First, gross rent. The payment standard applies to contract rent plus the utility allowance for whatever utilities the tenant pays directly. If the allowance for gas heat and electric in that unit size is 145, then a 1,720 standard supports a contract rent around 1,575, not 1,720. Water and sewer paid by the owner stay out of the allowance. The exact allowance comes off your housing authority's published schedule by bedroom count and fuel type, and those schedules get updated, so pull the current one rather than the one in the packet.

Second, rent reasonableness. The authority separately determines that the rent is reasonable compared to unassisted units of similar size and condition in the area. That determination can land below the standard. It is also the only thing that actually caps your contract rent. The payment standard does not cap it; the standard sets how the subsidy is calculated, not what you are allowed to charge. Gross rent can exceed the standard with the family paying the difference, subject to a limit at initial lease-up on how much of her own adjusted income a family can be required to put toward rent. So expect the reasonableness determination to set your number, and treat the 1,575 as the line past which every additional dollar comes out of the tenant's pocket rather than the authority's.

The split after that is administrative. When gross rent is at or below the payment standard, the tenant pays a portion based on adjusted income, generally around 30 percent, and the authority pays the balance to the owner. Above the standard she pays that share plus the entire excess. The owner collects the tenant share directly, and it is not backed by the program.

Which way your Monday answer goes depends on one assumption you haven't tested: the vacancy gap. If the authority in your area inspects within two weeks and pays retroactive to the pass date, the carry is small. If it inspects in five weeks and pays from the first of the following month, the carry is real money against a 1,180 payment. Ask them for both numbers, the current inspection scheduling window and the effective date rule, and get the answer in writing.

@rena-expert where do these schedules actually live? I've been building a target list and I'd rather know the payment standard and allowance for every submarket before I look at a single house. Is it always on the local authority's site or do you have to call?

Run the carry both ways before Monday. At 1,180 out of pocket, a 45 day gap is roughly 1,770 she spends to get an approved rent that might be 50 dollars below her current ask. At a 15 day gap it's 590 and the argument looks different.

Separate point on her financing. If she ever refinances that unit, an underwriter will treat the housing assistance payment as rent like any other rent, usually documented off the lease and the contract. Terms and documentation requirements vary by lender, so she should get that confirmed in writing rather than assume.

The three items you listed are not the list. They're the items you can see from standing in the room. GFCI and a handrail are an afternoon. The peeling porch trim on a 1958 house is where it turns into a project, because deteriorated paint on a pre-1978 property brings in a set of rules about how the surface gets disturbed and who's allowed to disturb it, and those rules and any certification requirements vary by state, so she needs someone licensed to tell her what applies to that house. I've watched a two hundred dollar scrape and repaint turn into a containment job with a certified crew. Budget the fix before you promise a timeline.

Setting aside the rent number, does the authority portion actually land on time every month? That's the whole reason anyone puts up with this, and I've never heard it from someone who collects it.

What I'd want to know in her position is what she's optimizing for. If she wants the highest rent this unit can get, the reasonableness determination will likely cap her at something under her current ask and she's done. If she wants a tenant who stays four years because there's a waiting list behind every participating unit, she's buying that with the inspection and the paperwork. Those are two different owners and only one of them should be doing this. Which one is she, @plumb?

The calendar is what catches owners off guard. Annual recertification for the tenant, inspections on the authority's cycle (some are biennial now, ask yours), and a rent increase request that has to go in with notice ahead of the anniversary and then be approved. It's not hard. It's dates you cannot miss, and the person who misses them is usually the owner who thought this was a set and forget arrangement.

@plumb, one thing about you specifically. If she's paying you a fee to sign paperwork, coordinate the inspection and be the contact of record, in a lot of states that starts looking like property management and there's a licensing question attached. It varies by state and by what exactly you do. Worth asking your state's real estate commission before you take a percentage rather than after.

Adding to @trellis, the other thing that varies by state and sometimes by city is whether she can decline a voucher applicant at all. A number of states and municipalities have source of income protections that make refusing a voucher unlawful, and others have nothing. Since she's deciding to opt in voluntarily it may be moot for her, but if she's ever thinking she can just say no next time, that depends entirely on local law and she should confirm it rather than assume.

GFCI receptacle in the kitchen is a fifteen dollar part. Basement handrail is a few hours and forty bucks of stock. On a 1958 house I'd also check that the kitchen and bath outlets aren't ungrounded two prong, because that's the one that turns into pulling wire, and I'd test every smoke and CO device in the place before anyone with a clipboard shows up.

The thing I'd have been embarrassed to ask out loud: does she still get to screen the person? Or does the authority send her a tenant and she takes them?

@sable the reason I keep looking at this from the capital side is that the authority portion behaves a bit like a coupon and the tenant portion behaves like ordinary rent. On the numbers in this thread, if the tenant share is around 340 and the authority pays 1,235, then roughly 78 percent of the income has a payer who doesn't lose a job. The other 22 percent is normal collection risk. That's a better income profile than a market rental and it isn't the fully guaranteed thing people describe.

Doing @tender's math with the rest of it. Say approved rent 1,575, gap of 40 days, so lost rent about 2,100 and cash out of pocket about 1,570 for the mortgage across that period. Repairs, call it 900 if the porch stays simple and much more if @harrow is right. Against relisting at 1,525 next week.

The voucher path only pays for itself over the hold, and it pays for itself in turnovers she doesn't do. She's had five weeks of vacancy on one turnover already. What's her average tenancy been on this unit?

Before Monday, get copies of the two documents she'll sign and read them, not the brochure. The housing assistance payments contract between owner and authority, and the tenancy addendum that attaches to her lease. The addendum is the one that matters, because where her own lease terms conflict with it, the addendum language governs, and owners who wrote their own lease clauses about entry or termination are usually surprised. Also look for what happens if a later inspection fails. Payments can be held during the abatement period while the owner keeps the obligation to house the tenant.

@plumb the utility allowance sheet is worth an hour of your time. Because she pays water and sewer, those lines drop out of the tenant's allowance, which raises the contract rent she can charge relative to an owner who makes the tenant pay water. That single choice is often 30 to 60 dollars of contract rent, and most owners never look at it.

The other line I'd read on that sheet is whether the allowance is quoted by bedroom count or by unit type, because a townhouse and a detached house sometimes sit in different columns.

@warrant is right about abatement. I'd add that if the unit fails at an annual inspection and she doesn't cure inside the window, the contract can be terminated and she's holding a tenant with no assistance payment coming in.

I'd relist at 1,525 and have a rent check in nine days. Five weeks vacant means the price was wrong, and vouchers don't fix a pricing problem, they add an inspection to it. Thin margins are what I run, and 1,570 of mortgage carry while I wait for a clipboard is not a trade I make on one unit.

Different answer if she owned twelve of these and wanted the whole portfolio on one system.

Reading @trellis's calendar post, is this actually less work than a market rental or more? I want income without a second job and this is starting to sound like a filing cabinet.

Two questions I'd want answered before I'd let anyone start paperwork on my behalf, @plumb. What's the authority's current inspection backlog in weeks, actually measured, and how many owners are already participating in that submarket. If the participating supply is thin and the waiting list is long, her unit is scarce and the constraints are worth accepting. If there are four hundred participating units in the same zip code, she's just accepting constraints.

Security deposit question, since I'm going to be on this side of it soon. Can she collect a normal deposit from a voucher tenant, and if there's damage past the deposit at move out, does the program cover any of it? I had a vague idea there used to be some kind of owner damage claim and that it's mostly gone.

On a 1958 townhouse the items that fail most often in my experience aren't the ones you spot. Window sashes painted shut so they don't open, a missing or nonfunctioning bathroom exhaust where there's no operable window, no handrail on the porch steps if there are four risers or more, and water heater relief valve discharge piped to nowhere. Walk it with a flashlight and open every window. @solder's point about two prong outlets is the expensive one.

@plumb one more thing to pin down in writing on Monday, since @rena-expert flagged it and it's the whole carry calculation. Ask the authority precisely what date payments start from once the unit passes. Some pay from the date of the passed inspection, some from the lease start, some from the first of the following month. Ask by email so you have the answer in text, and don't take a verbal from whoever answers the phone.

Let me make sure I have this straight. The 1,720 is a maximum for rent plus tenant-paid utilities, so subtracting an allowance gets her to something like 1,575, and then a separate comparison to nearby unassisted rents is what actually sets the ceiling on the contract rent. So the best case is roughly her current asking price and the realistic case is slightly under. Is that right?

@compass the screening is hers. The authority confirms program eligibility and income, and the owner applies her own criteria the way she would with anyone. The catch is the criteria that got her here. She turned down two applicants on an income rule, and a voucher household's income looks small on paper because the assistance is covering most of the rent. So she needs written standards that treat the tenant share as the amount to test against, applied the same way to everybody, or she's going to reject every applicant the program sends her.

@marlow it's not more hours, it's fixed hours you can't reschedule. A market rental is quiet until something breaks. This one has dates on it whether anything breaks or not.

@plumb what are you charging her for this? You've already spent a weekend on utility allowance schedules and inspection prep for one unit, and the small owners I talk to have no idea any of this exists. There's a real role in being the person who submits the packet and stands in the unit for the inspection. I'd want to know what an owner would actually pay for it before I built anything around it.

@beacon careful, because @trellis already named the licensing issue and it's the whole question. Coordinating a repair scope and being present at an inspection is one thing. Being the contact of record who signs the owner's paperwork and handles rent is somewhere else, and where the line falls is a state question. I've asked mine and got a clear answer in a week.

I have spent nine months doing exactly what this thread is doing, so let me say the thing I never say to myself. You can't answer Monday's question from a spreadsheet. The two numbers that decide it are the inspection scheduling window and the reasonableness determination, and only the authority has both. Email them tomorrow, ask for the current allowance schedule and the payment effective date rule, and tell her the honest range is 1,500 to 1,575 with a gap of unknown length.

Then she picks. She's the one carrying 1,180 a month, not you.