Some landlords love it, some landlords think they should try to avoid it. The CHA program is polarizing in the Chicagoland area among investors. Over the next six posts, I will be going over the ins and outs of working with CHA. In this post, we dive into an overview of the program. The following weeks will include screening tenants (and the best way to get CHA tenants to apply!), the inspection process, rent determination, what can cause payments to stop, and the mobility program.
Q: What is CHA?
A: CHA stands for “Chicago Housing Authority''. They distribute vouchers and administer the Section 8 program for Chicago. If you are in the Chicagoland suburbs, you would work with either Cook County Housing or DuPage Housing Authority. They are similar, but not exactly the same, so be sure to do some research if in the suburbs.
Q: What is Section 8?
A: From Google: “The Section 8 program allows private landlords to rent apartments and homes at fair market rates to qualified low income tenants, with a rental subsidy. 'Section 8' is a common name for the Housing Choice Voucher Program, funded by the U.S. Department of Housing and Urban Development.”
Q: What are the advantages of having a CHA Tenant?
A: Since a portion of the rent is coming from the government, many consider it a safer option when choosing a tenant, as the rent comes via ACH on the first, almost every month. (What can cause payments to stop will explain more on this in a few weeks.)
Q: What are some disadvantages?
A: The biggest disadvantage of a CHA tenant is that it can take weeks to get the program to approve your home and let the tenant move in. The inspection process is tedious, especially if the tenant has a child under 6. (In the coming weeks, I will have a new post on the inspection to explain more.) You also have to accept their HAP agreement and be okay with the rent that they propose. (More on rent determination coming soon!)
Q: I hear negative things about CHA tenants. Are they true?
A: We will go more in depth on this topic in our Screening CHA Tenants post ,but the short answer is most tenants on section 8 are great tenants going through a rough patch. With that being said, CHA does not screen the voucher holders for past histories, such as destroying someone else’s rental. You’ll want to make sure you are screening them the same way you would screen a market tenant with the exception regarding income.
Q: Is it against fair housing to deny a CHA tenant?
A: Illinois fair housing laws do make Source of Income a protected class, so you can not deny a CHA tenant due to income. But, if they don’t meet your standards in terms of credit score, rental history, etc., you can deny them.
Q: What if my house doesn’t pass inspection? Do I have to do the repairs and rent to them?
A: To rent to them, you will have to fix the repairs. However, if you believe you can find a market tenant to rent from you without doing the repairs, and the repairs are cost-prohibitive, you do not have to move forward with the CHA applicant.
Q: CHA offered me less rent than what I can get via market rent. Do I have to take it?
A: No. You have two choices: You can challenge the rent they proposed and see if you can get them to raise it. Or, you can move on and find a market tenant to rent to.
Q: I don’t have time to deal with all the CHA paperwork and inspections. What are my options?
A: Hire a property management company like us to handle all of the work on your rentals - whether CHA or market rent. Chicago Style Management turns rental investments in the Chicagoland area into passive income for our clients! Call 224-601-5415 to go over our available programs to help you with your investments.