Public and Indian Housing Program
The U.S, Department of Housing and Urban Development provides grants subsidies to 2,637 Public Housing agencies (PHA) nationwide. Many PHAs administer both public housing and Section 8 programs. HUD also provides assistance directly to PHAs' resident organizations to encourage increased resident management entities and resident skills programs. Programs administered by PHAs are designed to enable low-income families, the elderly, and persons with disabilities to obtain and reside in housing that is safe, decent, sanitary, and in good repair.
SECTION 8 HOUSING:
In this particular program, the housing authority will oversee a lease between a landlord and a tenant, whereby the tenant pays the landlord a portion of the rent and the housing authority pays the other portion directly to the landlord in the form of a HUD Housing Assistance Payment.
The tenant's landlord is calculated by having the tenant pay 30% of their gross annual income for rent. The gross income will decrease for dependents and child care allowances. For example, if the tenant earns $11,000 per year and they have $1,000 of allowances for children and child care, their total gross income is $10,000. 30% of $10,000 is $3,000. $3,000 divided by 12 months equals $250. The tenant's payment is $250, while the housing authority pays the remainder to the landlord.
SECTION 8 COMMON FRAUDS:
- The section 8 tenant fails to indicate their true annual earnings or the presence of assets, such as real estate. This is done in many cases by having different names, different SSN's, etc. A second "failed disclosure" is the tenant does not report the presence of a husband or boyfriend, who provides substantial income to the household. A third disclosure, which is not a failure to indicate, but a false statement is the creation of fictitious children to make it appear that you have allowances you don't.
- The landlord resides with the tenant, creating two frauds. 1) The tenant fails to disclose the presence of the landlord and housing assistance payment money the landlord receives every month as income; 2) The landlord can not reside in the same unit as the tenant. They must be separate dwellings. Every payment mailed or wired each month is considered overpayment and a potential separate count.
- The landlord contracts with a Section 8 tenant on paper only, meaning that the tenant has no intention of occupying the unit. Instead, the landlord moves in a market rate tenant and collects rent from them and the housing assistance payment from the housing authority simultaneously.
- The landlord collects Section 8 housing assistance payments on behalf of a vacant unit.
- The tenant and landlord are the same person. The tenant actually owns the property but hides ownership of the unit by having the checks sent to a different person. This "straw" owner will then forward the housing assistance payment back to the true owner/tenant. In some cases, the straw owner will receive a kickback for his participation.
PUBLIC HOUSING:
In this instance, the owner of the unit is the housing authority. The same 30% rules apply. The difference is that the tenant pays the housing authority directly and the housing authority does not have to pay a housing assistance payment to a landlord. They in fact are the landlord.
See Part 1 of Section 8 common frauds.