What To Know as a Landlord

Housing Choice Vouchers, also commonly referred to as HCVs, are the go-to sources of income for many people with low income in need of rental assistance. HCVs can make the difference to both a tenant and landlord in guaranteeing that monthly rents are paid.

Applying for these vouchers may seem confusing at first. Landlords accepting these vouchers may feel it is technical and burdensome because of the process they initially must go through.

On the right is a graphic, courtesy of HousingLink in Minnesota, illustrating the possible steps to accept rental assistance by an owner (or landlord), applicant, and housing authority/agency.

In our August blog post we broke down the expectations and steps that are part of the HCV process for tenants. Now, let’s better clarify this process for landlords (click here for Landlord Guidelines).

The Contract

In Washtenaw County, landlords can receive guaranteed rental payments through several HCV programs. One of the more well-known is the tenant-based voucher program which increases affordable housing choices for low-income individuals and families in privately owned rental housing. Another common one is the Veterans Affairs Supportive Housing, or VASH, program that provides permanent housing and ongoing treatment services to veterans who are unhoused.

Landlords leasing in Washtenaw County who are interested in receiving rental payments through the HCV program do not have to apply to participate. However, you will need to enter a Housing Assistance Payments (HAP) contract with the Michigan State Housing Development Authority (MSHDA) or another Public Housing Agency (PHA) such as the Ann Arbor or Ypsilanti Housing Commissions. This contract is MSHDA/the PHA’s pledge to pay rent on behalf of the HCV participant. In addition, you will need to provide a rental lease that is consistent with all state and local laws.

Steps After Contracting

You will need to create an account on MSDHA’s online partner portal. On this portal you can include banking information for HCV direct deposits. It also allows landlords to access information regarding payments, update contact and/or payment information, and view inspection results without having to contact the housing agency.

Listing Your Rental Property/ies

In general, you can find tenants by listing your Washtenaw County property directly on AffordableHousing.com. But to add your name to the landlord listing provided to voucher holders looking for housing, you will have to complete and return the Landlord Listing Application form to RPI Management. RPI, and CMA (Community Management Associates), are the two housing agencies MSHDA contracts within our area who handle the “day to day” requirements for the voucher. They do NOT collect HCV applications but rather manage HCV waiting lists as well as distribute HCV packets to individuals and families after they are approved. If you work with a PHA like the Ann Arbor Housing Commission they, too, can provide details on the methods used for posting your vacant units for HCV participants to search.

When listing your property, you will need to provide a standard rental application as well as any information related to tenant applicant screening. The rental lease and screening process must be consistent with all state and local laws. For example, the City of Ann Arbor has the Fair Chance Access to Housing Ordinance, which eliminates the use of criminal history in tenant selection. Ann Arbor, as well as Ypsi, both have ordinances protecting nondiscrimination of monies derived from any benefit or subsidy program, such as HCVs, as legal sources of income used by a tenant to afford rent. And, of course, covering all of Washtenaw County, the state, and federally, there is the Fair Housing Act which prohibits discrimination in the rental of housing based on a tenant’s race, color, religion, sex (including sexual harassment), national origin, familial status, and disability. MSHDA hosts free fair housing trainings to help landlords, tenants, and the public better understand this civil rights law and its enforcement.

Sometimes landlords may coordinate with a local housing provider like Avalon Housing, Michigan Ability Partners, Ozone House, SafeHouse Center or SOS Community Services (just to name a few of WHA’s member agencies) to lease up a household their case workers are assisting. This is a great partnership for landlords, providers, and those in need of stable, affordable housing! In particular, the landlord is supported by the provider staff who can help mitigate communications between them and tenants when there may be a misunderstanding during the leasing up process. The WHA and Housing Coordinators Network (HCN) coordinates a Landlord Advisory Group as a space for this type of collaboration and relationship building.

Accepting the Voucher

Voucher holders searching and applying for housing with an HCV will have landlord-related information and forms to share as part of a Landlord Packet. This packet will include the Rules and Regulations for the prospective tenant to follow when participating in the HCV program. These rules and regulations explain, for example, how tenants must notify the PHA if they leave the rental property for a long period of time or if their household size changes (guests can stay no more than 14 consecutive days, excluding child custody agreements).

When you are ready to accept a tenant’s application for a rental unit, they and/or the PHA will provide a Request for Tenancy Approval form. This form is not a lease, but rather a breakdown of costs the tenant and landlord will be expected to pay (i.e., which utilities are included or not, etc.)

Next, a Housing Quality Standards (HQS) inspection will be scheduled. Inspections are conducted by the PHA or a housing agent such as RPI or CMA. They perform an inspection based on health and safety standards – they will not inspect for cosmetic changes to the unit. If for any reason the inspection fails, you will need to make repairs ahead of a new one.

Finally, you will need to complete the HAP contract with the PHA. At the time rent is owed a landlord will receive one part of each month’s rent directly from the tenant (if applicable), and the remainder or full amount from the PHA. It can take up to 60 days for a landlord to receive their first check from the program. However, payments after this are quicker through direct deposit if the landlord opts in.

The amount of the subsidy available to the voucher holder is based on the cost of moderately priced rental housing in the community, as determined by MSHDA. The HCV will not pay for any costs before the unit passes inspection and the lease starts. HCV payments are not retroactive for this either.

If a landlord is renting to a tenant who is responsible for a portion of rent after the HCV pays, a landlord will have to let the PHA know if a tenant has stopped paying. Sometimes if rent increases, a voucher may be able to supplement but typically a tenant is responsible to pay the increase.

After the first year of the voucher and lease, the PHA will perform a recertification for the voucher while checking in on how the unit is being maintained by the tenant. If any repairs must be made at that time (or during the lease) the landlord has 30 days to complete.

Risk Mitigation

While landlords are concerned with risk mitigation when it comes to planned and unexpected property costs related to their tenants, there are programs to address those concerns. Landlords working with a housing provider and/or placement program like Rapid Re-Housing may gain access to some funding to cover repairs for unit damages or a loss of one-month’s rent.

It is important to remember renters with subsidies such as HCVs are reliable, long-term tenants, living in a unit for 7-8 years on average. Low-income renters with vouchers owe less back rent than those without vouchers. HCVs are approved for tenants to use for a minimum of one (1) year but if they are recertified, without incoming out of the program (e.g, having income that exceeds the voucher limit), there is no time limit to their voucher. HCVs provide guaranteed income for landlords and cause no more risk than if a landlord was renting to someone without a voucher.

Unfortunately, the most obvious negative consequence of landlords not participating in accepting HCVs falls on voucher families. When this happens, the HCV program and landlords both fail to support creating housing choices for those in the community. Instead, families are prevented from accessing the benefits available throughout the full community such as living closer to a job or school.

Vouchers are a critical resource to help households meet their needs beyond the rent they owe every month. The U.S. Census Bureau reports that renters with the lowest annual income have been spending more on rent since 2019. Half of these households paid gross rent that was more than 62.7 percent of their total household income. This is twice over the HUD cost burden ratio. The WHA and our member agencies cannot do the work alone to address the unaffordability in Washtenaw County without the collaboration of landlords. Let us move forward together and create #HousingForAll through the support of the HCV program.

If there are still questions about the HCV process or uncertainty in participating, there is an informative video that can help further explain in detail what to know. Click here to watch the 17-minute video.