HUD project based section 8 contracts - Posted by Lorelie (MA)

Posted by CarolFL on April 25, 1999 at 07:40:27:

No experience in negotiating with HUB section 8, but 60% doesn’t sound exorbitant if utilities are included.
Keep us posted…

HUD project based section 8 contracts - Posted by Lorelie (MA)

Posted by Lorelie (MA) on April 24, 1999 at 20:08:53:

Does anyone out there have any experience with HUD’s project based contracts? I am a somewhat experienced REI considering a purchase of 41 units in three buildings that have a 15 year contract expiring in 18 months. Current rents are less than individual sect 8 certificates would be (i.e. $675 for a 2 bedroom, versus $800). Does anyone have experience negotiating these with HUD? The guaranteed rent sounds good, and the current tenants are all long term, stable. Any information would be helpfull.

Also the current owner, who has no mortgage has had the property under management and claims the expenses run about 60% of gross income!!! Although they were built around 1900, they are in good condition and have practically no turnover of tenancy. I know the utilities (owner pays all) are high, but really! I don’t have a clear picture of the breakdown yet. Any thoughts on how these can be reduced?

Thanks for any help!

Re: HUD project based section 8 contracts - Posted by Jaime R

Posted by Jaime R on April 25, 1999 at 09:28:07:

Lorelie: My mgt co specializes in managing subsidized housing, so we have quite a bit of experience with HUD. These days, it’s hard to extend a Sec 8 contract when it expires, however if the owner starts now, he may be able to get a committment for some one year extensions. The affordable housing stock is dwindling and HUD wants to try and keep as many units affordable as it can.

I would caution you, however, that there is a tremendous amount of paperwork in managing bldgs with subsidies. Each year every tenant must be recertified and it is a lengthy and complicated process.

Good luck!