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Housing Choice Voucher Landlords
VIRTUAL LANDLORD OUTREACH EVENT
- Overview of MSHDA’s Housing Choice Voucher (HCV) program
- How to become a MSHDA HCV landlord
- Benefits of participating in MSHDA’s HCV program
- MSHDA landlord incentive programs
- 30 min Q&A
The Michigan State Housing Development Authority is one of the public housing agencies tasked with administering the Housing Choice Voucher (HCV) program in Michigan. The Housing Choice Voucher Program is the federal government’s primary program for assisting very low-income families, the elderly, and persons with disabilities to afford decent, safe, and sanitary housing in the private market. Since housing assistance is provided on behalf of the HCV tenant, participants are able to find their own housing, including single-family homes, townhouses and apartments. Housing Choice Vouchers are administered locally by public housing agencies (PHAs) that receive federal funds from the U.S. Department of Housing and Urban Development (HUD). This means that the tenant, landlord and PHA all have obligations and responsibilities under the HCV program.
HUD has posted HCV Program Facts with more information here: https://files.hudexchange.info/resources/documents/PIH-HCV-Landlord-Fact-Sheet.pdf
MSHDA utilizes contracted Housing Agents to assist with executing program requirements across the state. A list of MSHDA Housing Agents by county can be found at: https://www.michigan.gov/mshda/rental/housing-choice-voucher/hcv-housing-agencies
While the Michigan State Housing Development Authority (MSHDA) performs screenings on adult household members using the State of Michigan ICHAT and OTIS systems, and the National Dru Sjodin Sex-Offender Registry, the landlord/owner is responsible for screening the family and deciding to lease to the family, just as the landlord/owner would with any other potential tenant.
Additionally, tenants and landlords have obligations under the MSHDA HCV program. When tenants select a housing unit, they are expected to comply with the lease and the program requirements, pay their share of rent on time, maintain the unit in good condition, and notify their MSHDA Housing Agent of any changes in income or family composition.
The basic owner responsibilities in the Housing Choice Voucher program are outlined in the regulations as follows:
- Complying with all of the owner's obligations under the Housing Assistance Payments (HAP) contract and the lease
- Performing all management and rental functions for the assisted unit, including selecting a voucher-holder to lease the unit, and deciding if the family is suitable for tenancy of the unit
- Maintaining the unit in accordance with the Housing Quality Standards (HQS), including performance of ordinary and extraordinary maintenance
- Complying with equal opportunity requirements
- Preparing and furnishing to the PHA information required under the HAP contract
- Collecting the security deposit, the tenant’s rent, and any charges for unit damage by the family.
- Enforcing participant obligations under the dwelling lease
- Paying for utilities and services that are not the responsibility of the family as specified in the lease.
- Allowing reasonable modifications to a dwelling unit occupied or to be occupied by a disabled person
- Complying with the Violence Against Women Reauthorization Act of 2013 (VAWA) when screening prospective HCV tenants or terminating the tenancy of an HCV family
The landlord cannot occupy the rental unit, nor be related to any member of the participant family. Relatives include parents, children, grandparents, grandchildren, sister, brother, stepfamily, or in-law of any member of the family who will live in the assisted unit. An exception may be granted if it is necessary to provide reasonable accommodation for a family member with disabilities.
A summary of MSHDA’s tenant and landlord obligations for the HCV Program can be found here: Notice and Disclosure of Select HCV Rules
The unit will be inspected by the MSHDA Housing Agent and must comply with HUD's minimum Housing Quality Standards (HQS). The landlord/owner is responsible for any repairs required to keep the unit in compliance with HQS as notified by MSHDA. Required repairs must be made in order for MSHDA to begin or continue making rental payments.
No unit can be approved until MSHDA has determined that the rent for the unit is reasonable. The purpose of the rent reasonableness test is to ensure that a fair rent is paid for each unit rented under the HCV program.
- HUD regulations define a reasonable rent as one that does not exceed the rent charged for comparable, unassisted units in the same market area. HUD also requires that owners not charge more for assisted units than for comparable units on the premises.
- Once the tenant and landlord/owner have submitted the required paperwork containing information about the proposed assisted unit, the MSHDA Housing Agent will use data from similar units in the neighborhood to determine if the requested rent is reasonable.
An HCV tenant cannot pay more than 40% of their adjusted monthly income for rent and tenant-supplied utilities. If the unit exceeds the 40% affordability limit, MSHDA cannot approve the unit for rental assistance unless the owner is willing to negotiate the rent and/or utility responsibility.
The utility amount for the rental unit is determined using MSHDA’s Utility Schedules.
The landlord/owner may collect a security deposit from the tenant that does not exceed one and one-half month's rent.
The landlord/owner responsible for collecting the tenant's portion of the monthly rent. The landlord/owner and the tenant will determine the monthly rent. However:
- During the initial lease term, the tenant cannot pay more than 40 percent of their adjusted gross income toward rent and utilities,
- The monthly rent cannot exceed the reasonable rent as determined by MSHDA, and
- Assuming the monthly rent is reasonable, MSHDA will contract for payment of the difference between the contract rent and the tenant's portion.
The landlord/owner must provide a lease to MSHDA for review. While the lease is between the landlord/owner and the tenant, MSHDA must approve the lease. The lease must contain at a minimum:
- The names of the owner and the tenant
- The unit rented (address, apartment number, and any other information needed to identify the contract unit)
- The term of the lease (initial term and any provisions for renewal)
- The amount of the monthly rent to owner
- A specification of what utilities and appliances are to be supplied by the owner, and what utilities and appliances are to be supplied (paid for) by the tenant.
- List all persons who will live in the unit (including live-in aides). Only Landlord and MSHDA approved persons may reside in the unit.
A Tenancy Addendum must be attached to every lease and includes HUD’s requirements for the tenancy. If there is conflict between the landlord/owner’s lease and the Tenancy Addendum, the terms of the Tenancy Addendum prevail over any other provisions of the lease.
MSHDA will enter into a Housing Assistance Payment (HAP) Contract with the landlord/owner. The contract is MSHDA's pledge to pay rent on behalf of the HCV participant.
Proof of Ownership
Proof of Ownership is required for all assisted units. There are exceptions for units with certain types of financing. Acceptable proof of ownership includes:
- Printout or screenshot from a city or county register of deeds website;
- Copy of title insurance policy for the property that shows the landlord as the owner of the property;
- Copy of Title Commitment or Title Search document;
- Copy of a recorded warranty deed, recorded quit claim deed, recorded deed of trust, or recorded covenant deed;
- Land Contract: Two documents are required for Proof of Ownership when there is a Land Contract in place: a) A copy of the signed Land Contract; and b) The Seller’s Proof of Ownership document;
- Another Legal Document such as:
- Landlord Death – A copy of the court order appointing a Personal Representative if the landlord died “Intestate.” The Personal Representative is normally required to obtain a FEIN from the IRS.
- Surviving Spouse – A copy of the death certificate and proof of joint ownership of property (i.e. current property tax statement or deed to property).
- Not survived by spouse – A copy of the death certificate and a copy of the landlord’s Last Will and Testament.
- Divorce – Copy of court order transferring property; or
- For properties with five (5) or more units, proof of paid taxes from the most recent tax cycle.
Proof of Paid local real estate taxes, fines, and assessments
Proof of paid local real estate taxes, fines, and assessments is required for all assisted units. There are exceptions for properties with certain types of financing. Acceptable proof of paid real estate taxes, fines, and assessments is:
- Paid receipt or statement from the local tax authority stating account is current;
- Printout from city, township, or county website stating account is current; or
- Current document from local tax authority stating owner has entered into and is in compliance with a repayment agreement for unpaid taxes.
MSHDA will provide the owner with the required documents to complete in order to be registered as a payee on the State of Michigan's payment system. More information on payments can be found here: https://www.michigan.gov/mshda/rental/welcomelandlords/housing-choice-vouchers-landlords---payment-information
LEASE OR RENT ADJUSTMENTS
After the initial lease term has been completed, and annually after that, a landlord/owner may request contract rent increases. The request for a rent increase must be received by the MSHDA Housing Agent and the tenant at least 60 days prior to the requested effective date of the change. Once the rent increase request has been received by the MSHDA Housing Agent, a review will be done to ensure that the rent requested does not exceed the rent charged for comparable, unassisted units in the same market area. See above for more information on rent reasonableness.