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What is federally subsidized housing?
Federally subsidized housing means that the federal government provides funding to assist with rent payments. The part of rent the government pays is called the "subsidy". Unlike private rental housing, where the tenant pays all the rent themselves, landlords in federally subsidized housing programs have many more rules to follow.

What is the Section 8 Housing Choice Voucher (Voucher) program?
The Voucher program is a "tenant-based" rent subsidy program. This means that the household does not have to move into a specific unit in order to receive rental assistance. The household can rent a unit in the private market and receive help with paying their rent. If the household continues to meet eligibility criteria the rental assistance can move with the household if it relocates to another unit that meets HUD's standards.

How does SFHRC determine if a landlord can participate in the Voucher program?
HUD's definition of a property owner includes a principal or other interested party, not merely the nominal entity that holds legal title to the property. It also covers other persons with actual interest in the property. In the event that a household wishes to rent from a partnership, SFHRC may refuse to enter into a HAP Contract on behalf of a household where a general or limited partner has committed fraud in connection with a federal housing program. SFHRC may require prospective owners to disclose ownership interest.

SFHRC reserves the right to refuse to enter into a Section 8 Housing Assistance Payments (HAP) Contract with a property owner for any reason listed below:
  • The owner has been disbarred, suspended or subject to a limited denial of participation under 24 CFR, Part 24; or
  • The federal government has instituted an administrative or judicial action against the owner for violation of the Fair Housing Act of other federal equal opportunity requirements and the action is pending; or
  • A court or administrative agency has determined that the owner violated the Fair Housing Act or other federal equal opportunity requirements; or
  • The owner's participation in drug-related or violent criminal activity; or
  • The owner has committed fraud, bribery or any other corrupt or criminal act in connection with any federal housing program; or
  • The owner verbally or physically threatens SFHRC staff; or
  • The owner is a parent, child, grandparent, grandchild, sister, brother (including those related through marriage, i.e., in-laws) of any member of the applicant household seeking the initial use of the Voucher unless SFHRC determines that approving the unit would provide a household member a reasonable accommodation to a qualified individual with disabilities; or
  • The owner has violated any obligations under a HAP Contract; or
  • A conflict of interest exists under federal or state law
  • The owner is a present or former member or officer of SFHRC, except as resident commissioner;
  • The owner is an employee of SFHRC or any contractor, subcontractor or agent of SFHRC who formulates policy or influences program decisions, examples include but are not limited to:
    • SFHRC management staff; Housing Specialists, consultants for the Section 8 rental assistance programs;
  • SFHRC staff that does not have any administrative responsibilities for the Section 8 Voucher or Mod Rehab program will be eligible to participate in the programs as a property owner.
  • The owner is a public official, member of a voting body, or state legislator, county commissioner or city councilor who exercises functions or responsibilities related to the Voucher or Mod Rehab program; or the owner is a member of the United States Congress.

What is SFHRC's role under the Voucher program?
The role of SFHRC is to administer the Voucher program which includes determining a household's eligibility for participation in the program, briefing the household on the program; conducting evaluations of the property to determine it meets HUD's Housing Quality Standards, determining the amount of rental assistance that can be paid on the household's behalf, securing signatures on necessary documents, ensure compliance with the terms of the Housing Assistance Payments Contract, paying monthly rental assistance and complying with IRS reporting requirements including provision of 1099 forms.

What functions aren't provided by SFHRC?
One misconception is that SFHRC is responsible for the tenant's actions, or failure to act, under the lease agreement. SFHRC is not a party to the lease; and consequently, has no property management enforcement abilities.

SFHRC does not screen Voucher holders for suitability as a tenant. The landlord is responsible for screening prospective tenants carefully to ensure that their investment has been placed in the possession of a tenant who will take proper care of the property. Landlords should use the same criteria to screen Voucher holders as they would any other prospective tenant. The same rejection criteria should also be applied.

How much rent can be charged under the Section 8 Voucher program?
Note: If a landlord is unsure how much you should charge for rent SFHRC recommends that s/he contact local property management companies and seek guidance on current rents for a specific area.

There is no limit so long as the rent request is not higher than other units renting in the same area on the open market. SFHRC will review the rent the landlord is requesting to determine if it appears to be a fair rent based on rents for comparable units. SFHRC is required by federal law to certify that the rent being paid for the subsidized unit is not greater than rent being charged for comparable non-Section 8 assisted units. This is to ensure that federal tax dollars are not being used to inflate rents in the private rental market.

Rent comparability is determined by comparing the rent for the Section 8 unit to other similar units. The comparability process is somewhat like an appraisal. SFHRC will consider the unit's size, location, quality and age of amenities (I,e., carpet, dishwasher, appliances, air conditioning, etc.). Also considered is the unit's interior condition and the exterior amenities and appearance of the building. These are then compared with other like units and the rents are evaluated.

What steps should a landlord take if s/he decides to rent to a Section 8 Voucher holder?
The Voucher holder will have a document called a Request For Tenancy Approval which notifies SFHRC of the landlord and Voucher holder's intent to enter into a lease agreement. SFHRC will use information on this document to determine:
  1. The amount of utility allowance the Voucher holder is entitled to offset cost of utilities not included in the rent (excluding telephone, cable tv and air conditioning costs);
  2. To perform a rent burden test, i.e., federal law prohibits the Voucher holder from paying more than 40 percent of their monthly adjusted income for shelter costs during the initial term of the lease agreement.

This document is also used to arrange for an evaluation of the premises to determine if it meets HUD's Housing Quality Standards (HQS).

What if the rent burden test is not met?
There is a maximum amount of subsidy SFHRC can pay on a Voucher holder's behalf each month. It is the family's responsibility to pay the difference between the subsidy and the rent the landlord is charging for the unit. If the family's portion of the rent is more than 40% of their monthly adjusted income, as determined by SFHRC, they cannot receive rent subsidy in that unit. In this case there are 2 options:
  1. The Voucher holder must continue their search for housing that will meet the program's requirements; or
  2. The landlord can lower the contract rent for the unit.

If the landlord opts to lower the contract rent for the unit the landlord and Voucher holder cannot agree for the Voucher holder to make ?side payments? to make up the difference in rent. This would be a violation of federal law.

How much security deposit can a landlord collect under the Section 8 Voucher program?
Owners may collect a security deposit from prospective tenants provided the following criteria are met:
  1. The security deposit may not be in excess of amounts charged by the landlord to unassisted tenants;
  2. The security deposit required does not violate state law.

How is the amount of subsidy determined?
There are five factors that are taken into consideration in calculating the monthly subsidy:
  1. 30% of the Voucher holder's household monthly adjusted income;
  2. 40% of the Voucher holder's household monthly income;
  3. SFHRC's "Payment Standard" for the bedroom size the Voucher holder qualifies for;
  4. The rent the landlord is asking for the unit; and
  5. SFHRC's allowance for tenant paid utilities.

What is the process for conducting HQS evaluations?
After SFHRC has determined that the rent burden test is met it will contact the landlord to schedule an appointment to conduct the evaluation. The unit is assumed to be ready for occupancy when the appointment is scheduled. HUD's HQS requirements are designed to insure that units on which rent subsidies are paid will provide a safe and healthy living environment for the family.

If one deficiency is found during the unit evaluation the entire unit fails. SFHRC is prohibited from starting to provide rental assistance until the deficiency is corrected and SFHRC receives verification of such. No subsidy payment can be made for any days preceding the confirmation of completion.

HQS evaluations are conducted on units receiving subsidy on annual basis for the duration of the HAP Contract.

How often is the HQS evaluation done?
In addition to the initial unit evaluation SFHRC is required to conduct an evaluation of each unit under a HAP Contract on an annual basis.

The landlord and family will be notified if deficiencies are found during the annual evaluation. The landlord is required to correct the deficiencies within the time period specified in the notice of deficiencies.

What happens if the landlord needs more time to correct the deficiencies or if s/he fails to complete repairs in the timeframe listed in the notice?
SFHRC will consider a request for an extension to complete repairs if the landlord has a good reason for the delay. Examples of good reasons include, but are not limited to: weather prohibits exterior work to be done, parts for repair are on backorder; schedule of tradesman to complete work.

If the landlord fails to correct the deficiencies within the prescribed time the HAP Contract will terminate and the subsidy cease. The family could relocate to another unit that qualifies for the program or remain in-place and pay the full rent themselves.

Is the landlord responsible for tenant caused damages that are a deficiency under HUD's HQS?
No. Owners are not responsible for HQS violations caused by the family. Families who fail to pay for utilities for which they are responsible, who fail to supply and maintain appliances for which the owner is not required to supply under the lease, or who (or whose guests) cause damage to the unit beyond normal wear and tear will be considered to breach family obligations under the Voucher program and will face termination or subsidy.

For information on HUD's Housing Quality Standards please visit our HQS section of this website.

Is it okay to allow the Voucher holder to move into the unit prior to SFHRC determining that the unit meets HUD's HQS or the rent burden test?
If the landlord allows the tenant to move in prior to SFHRC determination that the property meets all of HUD's requirements the landlord will have a tenant in possession who may not receive any rent subsidy. The Voucher holder would be responsible for paying the entire rent until SFHRC determines the unit is in compliance with all HUD requirements. In these cases, SFHRC does not provide rent subsidy retroactively.

Is the landlord required to use a program "model" lease?
No. Federal regulations require that the landlord and family have a written lease. The landlord may utilize the standard lease agreement s/he uses for open market tenants including any addendums or attachments.

The effective date of the lease agreement must coincide with the effective date of the HAP Contract.

What happens after the initial term of lease?
There are 3 options available to the landlord and family:
  1. Allow the terms and conditions under the initial lease term to go month-to-month;
  2. Enter into a new lease agreement; or
  3. The family vacates the property.

If the landlord and family entered into a new lease agreement s/he must provide SFHRC with a copy of the document. SFHRC must conduct a rent reasonableness test. If it does SFHRC will execute a HAP Contract that coincides with the lease agreement.

Is the landlord able to raise the contract rent?
Yes, after the initial term of the lease the landlord can increase the rent. The HAP Contract requires that the landlord provide the family and SFHRC with sixty days advance written notice of new rent.

Is there any prohibited terms the landlord should be aware of?
The lease a landlord signs with a Section 8 participant should be a standard lease used for any other rental units the landlord owns or manages on the open market. The terms of the lease must be in accordance with state and local law and any additional terms or conditioned changes need to be provided to SFHRC as they occur. All household members must be listed on the lease and any changes must be approved by SFHRC and the landlord.

Part C: Tenancy Addendum, Section 8 Housing Choice Voucher Housing Assistance Payments Contract includes the prohibited lease terms.

When can the landlord expect to receive its subsidy payment?
After the unit has been evaluated and approved a Housing Assistance Payments (HAP) Contract will be executed. This is a legally binding contract between SFHRC and the landlord that sets forth the responsibilities of each party under the program rules and allows SFHRC to make subsidy payments to the landlord.

Housing Assistance Payments checks are mailed out the first working day of the month provided the US Treasury has deposited money in its account to cover the HAP.

The family is not responsible for the portion of the rent that is covered by the subsidy. The landlord cannot terminate tenancy because SFHRC has not paid the subsidy. If for some reason the landlord does not receive a check then s/he should contact SFHRC as soon as possible to resolve the situation.

What are some of the terms and conditions of the HAP Contract?
The HAP Contract covers a specific family receiving a subsidy payment in a specific unit. If the family relocates to another unit, even in the same building, the HAP Contract is terminated and the subsidy ceases.

What if the tenant doesn't follow the lease or causes problems for others?
The landlord maintains the rights and responsibilities that are provided under state law. The landlord has the right to evict the tenant for failure to comply with the terms of the lease agreement or for "other good cause".

SFHRC requests that you communicate to it when there are lease violations caused by the tenant receiving rental assistance and provide a copy of lease violation notices at the same time you provide it to the tenant. By providing SFHRC with this information, action can be taken to terminate a program participant who repeatedly fails to follow the program rules.

What is considered "other good cause"?
The definition of other good cause includes:
  1. Not accepting an offer of a new lease or revision;
  2. A family history of disturbance to the neighbors;
  3. Destruction of property or living/housekeeping which result in damage to the unit or premises;
  4. The owner desires to use the unit for a purpose other than a residential unit;
  5. A business or economic reason such as sale of the property or renovation.

What should a landlord do if s/he does not receive a HAP check when they expect one?
The landlord should contact SFHRC. There are several reasons a subsidy check could be delayed including, but not limited to:
  1. SFHRC did not receive notice that deficiencies have been corrected;
  2. Paperwork was not returned to SFHRC in time to process check;
  3. Missing or incomplete information.

Generally speaking a check may be reported as lost 10 days after the date of the mailing. If this time period has passed and the landlord still has not received the HAP check s/he should notify SFHRC to request a stop payment and a replacement check.

What should a landlord do if s/he receives a regular monthly check and the family subsequently vacates the unit in the middle of the same month?
Under the Voucher program regulations, the landlord may keep the subsidy received for the month in which the family vacates the unit.

Can the subsidy amount change?
Yes, if there is a change in the family's composition or income SFHRC will adjust the subsidy amount.

How does the landlord request that their HAP check be sent to a different address?
The landlord needs to contact SFHRC to advise them of the new address.

What happens if the landlord sells or purchases property that is under a Voucher HAP Contract?
SFHRC must be notified immediately. Both the seller and purchaser will be required to sign an Assignment of Lease and HAP Contract. SFHRC will not transfer the subsidy payment to the new owner until this document is signed by all parties and SFHRC has received an IRS form W-9 from the new owner.

Our Mission

The mission of the Sioux Falls Housing & Redevelopment Commission is to improve the quality of life for the Sioux Falls Community, specifically its lower income residents, by administering housing assistance payments programs, promoting the development of affordable, decent and safe housing opportunities, and economic self-sufficiency in a non-discriminatory manner.

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