The Federal HUD Handbook 4350.3 deals with the federal requirements of the housing voucher program commonly called ‘section 8’.
Several states have their own policies regarding screening of low income applicants which utilize the voucher program. Additionally, each local PHA (Public Housing Agency) interprets these at a local level. These guidelines, interpreted by the local PHA, would be required by any landlord (and thus their screening agency) who deals with low income, housing voucher applicants.
Note: What follows are certain selections from the HUD Handbook which are important to the tenant screening process. Much of the text below is taken directly from the Handbook.
This information was provided as a courtesy by NAPBS Member William Bower of Contemporary Information Corp. Specific comments from Mr. Bower are denoted by [brackets]. Also, text that Mr. Bower felt is important is bolded and italicized.
We sincerely thank Mr. Bower for his willingness to share this content with our subscribers.
Section 4: Selecting Tenants from the Waiting List
[This Section covers tenant selection and screening criteria . It also discusses applicant interviews, and applicable requirements and procedures when applicants are found to be ineligible, including written notification to applicants of denial of assistance.]
Figure 4-1: Key Terms
- Denial of tenancy or assistance
- Displaced person
- Market area
- Preliminary application
- Residency preference
- Tenant selection plan
- Waiting list
[Section D of the introduction states the following:]
- Required Criminal and Drug Screening Standards
- 24 CFR part 5, subpart I – Preventing Crime in Federally Assisted Housing – Denying Admission and Terminating Tenancy for Criminal Activity and Alcohol Abuse
- 24 CFR part 5, subpart J – Access to Criminal Records and Information
Paragraph 1 references 24 CFR part 5, subpart I which states the following:
- 5.855 When am I specifically authorized to prohibit admission of individuals who have engaged in criminal activity?
- You may prohibit admission of a household to federally assisted housing under your standards if you determine that any household member is currently engaging in, or has engaged in during a reasonable time before the admission decision:
- Drug-related criminal activity;
- Violent criminal activity;
- Other criminal activity that would threaten the health, safety, or right to peaceful enjoyment of the premises by other residents; or
- Other criminal activity that would threaten the health or safety of the PHA or owner or any employee, contractor, subcontractor or agent of the PHA or owner who is involved in the housing operations.
- You may establish a period before the admission decision during which an applicant must not have engaged in the activities specified in paragraph (a) of this section ( reasonable time ).
- If you previously denied admission to an applicant because of a determination concerning a member of the household under paragraph (a) of this section, you may reconsider the applicant if you have sufficient evidence that the members of the household are not currently engaged in, and have not engaged in, such criminal activity during a reasonable period, determined by you, before the admission decision.
This section of 24 CFR part 5, subpart I goes on to state the following:
- 5.856 When must I prohibit admission of sex offenders?
You must establish standards that prohibit admission to federally assisted housing if any member of the household is subject to a lifetime registration requirement under a State sex offender registration program. In the screening of applicants, you must perform necessary criminal history background checks in the State where the housing is located and in other States where the household members are known to have resided. (See §5.905.)
- 5.857 When must I prohibit admission of alcohol abusers?
You must establish standards that prohibit admission to federally assisted housing if you determine you have reasonable cause to believe that a household member’s abuse or pattern of abuse of alcohol interferes with the health, safety, or right to peaceful enjoyment of the premises by other residents.
24 CFR part 5, subpart J – Access to Criminal Records and Information addresses where PHA’s and owner / managers can access criminal records:
- 5.903 What special authority is there to obtain access to criminal records?
- Authority. If you are a PHA that administers the Section 8 program and/or the public housing program, this section authorizes you to obtain criminal conviction records from a law enforcement agency, as defined in §5.902. You may use the criminal conviction records that you obtain from a law enforcement agency under the authority of this section to screen applicants for admission to covered housing programs and for lease enforcement or eviction of families residing in public housing or receiving Section 8 project-based assistance.
- Consent for release of criminal conviction records.
- In order to obtain access to records under this section, as a responsible entity you must require every applicant family to submit a consent form signed by each adult household member.
- By execution of the consent form, an adult household member consents that:
- Any law enforcement agency may release criminal conviction records concerning the household member to a PHA in accordance with this section;
- The PHA may receive the criminal conviction records from a law enforcement agency, and may use the records in accordance with this section.
- Procedure for PHA.
- When the law enforcement agency receives your request, the law enforcement agency must promptly release to you a certified copy of any criminal conviction records concerning the household member in the possession or control of the law enforcement agency. NCIC records must be provided in accordance with NCIC procedures.
- The law enforcement agency may charge you a reasonable fee for releasing criminal conviction records.
- Owner access to criminal records —
- If an owner submits a request to the PHA for criminal records concerning an adult member of an applicant or resident household, in accordance with the provisions of paragraph (d) of this section, the PHA must request the criminal conviction records from the appropriate law enforcement agency or agencies, as determined by the PHA.
- If the PHA receives criminal conviction records requested by an owner, the PHA must determine whether criminal action by a household member, as shown by such criminal conviction records, may be a basis for applicant screening, lease enforcement or eviction, as applicable in accordance with HUD regulations and the owner criteria.
- The PHA must notify the owner whether the PHA has received criminal conviction records concerning the household member, and of its determination whether such criminal conviction records may be a basis for applicant screening, lease enforcement or eviction. However, except as provided in paragraph (e)(2)(ii) of this section, the PHA must not disclose the household member’s criminal conviction record or the content of that record to the owner.
- Screening. If you are an owner of covered housing, you may request that the PHA in the jurisdiction of the property obtain criminal conviction records of an adult household member from a law enforcement agency on your behalf for the purpose of screening applicants.
4-7 B Key Requirements and 4-7 C Screening for Drug Abuse and other Criminal Activity.
- Key Requirements
- Owners are permitted to establish and apply written screening criteria to determine whether applicants will be suitable tenants. If an owner’s review of information about the applicant indicates that the applicant will not be a suitable tenant, the owner may reject the application for assistance or tenancy.
- Owners must establish written screening criteria to prohibit the admission of certain individuals who have engaged in drug-related criminal behavior, or are subject to a state lifetime sex offender registration program, or are individuals whose abuse or pattern of abuse of alcohol interferes with the health, safety, or right to peaceful enjoyment of the premises by other residents. Owners may choose to expand these requirements regarding prohibition of admission to certain applicants [24 CFR part 5, subpart I & J].
- Screening criteria must be included in the tenant selection plan. (See paragraph 4-4 C and Figure 4-2.)
- Owners must apply screening criteria uniformly to all applicants to prevent discrimination and avoid fair housing violations.
- The screening of live-in aides at initial occupancy and the screening of persons or live-in aides to be added to the tenant household after initial occupancy involve similar screening activities. Both live-in aides and new additions to the tenant household must be screened for drug abuse and other criminal activity **by applying the same criteria established for screening other applicants.** In addition, owners may apply any other owner established applicant screening criteria to new household members in order to establish suitability for tenancy. Owner established screening criteria may also be applied to live-in aides, except for the criterion regarding the ability to pay rent on time because live-in aides are not responsible for rental payments.
- * Police officers and other security or management personnel that reside in subsidized units are subject to the same screening criteria as other applicants. *
- The costs of screening must not be charged to applicants. Such costs may be charged against the project operating account. A variation on this rule applies to cooperatives.
- Certain types of screening are prohibited. See paragraph 4-8 below.
- Screening For Drug Abuse And Other Criminal Activity
- Tenant selection plans must contain screening criteria that include standards **for** prohibiting admission of those who have engaged in drug-related or criminal activity. The plan may, under certain circumstances, include additional provisions that deny admission to applicants for other drug and criminal activity.
- Owners must establish standards that prohibit admission of:
- Any household containing a member(s) who was evicted in the last three years from federally assisted housing for drug-related criminal activity. The owner may, but is not required to, consider two exceptions to this provision:
- The evicted household member has successfully completed an approved, supervised drug rehabilitation program; or
- The circumstances leading to the eviction no longer exist (e.g., the household member no longer resides with the applicant household).
- A household in which any member is currently engaged in illegal use of drugs or for which the owner has reasonable cause to believe that a member’s illegal use or pattern of illegal use of a drug may interfere with the health, safety, and right to peaceful enjoyment of the property by other residents;
- Any household member who is subject to a state sex offender lifetime registration requirement; and
- Any household member if there is reasonable cause to believe that member’s behavior, from abuse or pattern of abuse of alcohol, may interfere with the health, safety, and right to peaceful enjoyment by other residents. The screening standards must be based on behavior, not the condition of alcoholism or alcohol abuse.
- Any household containing a member(s) who was evicted in the last three years from federally assisted housing for drug-related criminal activity. The owner may, but is not required to, consider two exceptions to this provision:
- Owners may establish additional standards that prohibit admission if the owner determines that any household member is currently engaging in, or has engaged in, the following activities during a reasonable time before the admission decision:
- Drug-related criminal activity. The owner may include additional standards beyond the required standards that prohibit admission in the case of eviction from federally assisted housing for drug related criminal activity and current drug use.
- Violent criminal activity.
- Other criminal activity that threatens the health, safety, and right to peaceful enjoyment of the property by other residents or the health and safety of the owner, employees, contractors, subcontractors, or agents of the owner.
NOTE: * If an owner’s admission policy includes any of the activities above or similar restrictions that uses a standard regarding a household member’s current or recent actions, the owner may define the length of time prior to the admission decision during which the applicant must not have engaged in the criminal activity. The owner shall ensure that the relevant “reasonable” time period is uniformly applied to all applicants in a non-discriminatory manner and in accordance with applicable fair housing and civil rights laws.*
- An owner’s screening criteria also may include the following provisions:
- Exclusion of culpable household members. An owner may require an applicant to exclude a household member when that member’s past or current actions would prevent the household from being eligible.
- Drug or alcohol rehabilitation. When screening applications, an owner may consider whether the appropriate household member has completed a supervised drug or alcohol rehabilitation program. The owner may require appropriate documentation of the successful completion of a rehabilitation program.
- Length of mandatory prohibition. The owner may set a period longer than required by the regulation (as described in subparagraph C.2 above) that prohibits admission to a property for disqualifying behavior. For those behaviors that would result in denial for a “reasonable time,” the owner must define a reasonable period in the tenant selection plan.
- Reconsideration of previously denied applicants. An owner may reconsider the application of a previously denied applicant if the owner has sufficient evidence that the members of the household are not and have not engaged in criminal activity for a reasonable period of time. The owner must define a reasonable period of time in the tenant selection plan. * When the owner chooses to adopt this admission provision, the owner must require the household member to submit documentation to support the reconsideration of the decision which includes:
- A certification that states that she or he is not currently engaged in such criminal activity and has not engaged in such criminal activity during the specified period.
- Supporting information from such sources as a probation officer, a landlord, neighbors, social service agency worker or criminal record(s) that were verified by the owner.*
- Consideration of the circumstances relevant to a particular case. In developing optional screening criteria for a property, and applying the criteria to specific cases, owners may consider all the circumstances relevant to a particular household’s case. Such considerations may not be applied to the required screening criteria described in subparagraph C.2 above. These types of circumstances include:
- The seriousness of the offense;
- The effect denying tenancy would have on the community or on the failure of the responsible entity to take action;
- The degree of participation in the offending activity by the household member;
- The effect denying tenancy would have on non offending household members;
- The demand for assisted housing by persons who will adhere to lease responsibilities;
- The extent to which the applicant household has taken responsibility and takes all reasonable steps to prevent or mitigate the offending action; and
- The effect of the offending action on the program’s integrity.
- Considerations In Developing Screening Criteria
Specific screening criteria will vary from property to property. In developing screening criteria, owners may want to consider the following factors:
- Length of the property’s waiting list. An owner of a property that has a long waiting list may consider establishing relatively restrictive screening standards, whereas an owner of a property with little or no waiting list may want to have less restrictive standards. Setting standards involves balancing the need to fill vacancies with the long-term effect of accepting higher risk tenants. Thorough screening often makes the project more attractive to applicants, thereby decreasing vacancies and turnover.
- Application and screening fees. Screening takes staff time and may require funds to pay for credit reports and other information.
- Rental housing. Owners may not charge application fees or require applicants to reimburse them for the cost of screening, including screening for criminal history. Therefore, owners will want to carefully weigh the cost of various screening activities against the benefits. Screening costs may be charged as an operating expense against the property operating account.
4-7 E Permitted Screening Criteria Commonly Used by Owners
- Permitted Screening Criteria Commonly Used by Owners
- Overview. Owners are permitted to screen applicants for suitability to help them to determine whether to accept or deny an applicant’s tenancy. Owners should consider at least developing screening criteria related to the following factors and may establish other criteria not specifically prohibited in paragraph 4-8 below. All screening criteria adopted by the owner must be described in the tenant selection plan and consistently applied to all applicants.
- Screening for credit history. Examining an applicant’s credit history is one of the most common screening activities. The purpose of reviewing an applicant’s credit history is to determine how well applicants meet their financial obligations. A credit check can help demonstrate whether an applicant has the ability to pay rent on time.
- Owners may reject an applicant for a poor credit history, but a lack of credit history is not sufficient grounds to reject an applicant.
- As part of their written screening criteria, and in order to ensure that all applicants are treated fairly, owners should describe the general criteria they will use for distinguishing between an acceptable and unacceptable credit rating. Owners are most often interested in an applicant’s credit history related to rent and utility payments. A requirement for applicants to have a perfect credit rating is generally too strict a standard.
- Owners may determine how far back to consider an applicant’s credit history. Owners generally focus on credit activity for the past three to five years. It is a good management practice to give priority to current activity over older activity.
- Owners may have to justify the basis for a determination to deny tenancy because of the applicant’s credit rating, so there should be a sound basis for the rejection.
- Minimum Income Requirement. Section 236 and Section 221(d)(3) BMIR (Below Market Interest Rate Loan Program) applicants who receive no other form of assistance, such as Section 8, may be screened for the ability to pay the Section 236 basic rent or the BMIR rent. Owners may establish a reasonable minimum income requirement to assess the applicant’s ability to pay the rent. In the Section 8, RAP (Relocation & Acquisition Policies), and Rent Supplement programs, owners may not establish a minimum income requirement for applicants. (See paragraph 4-8 A.) (see also the Enterprise Income Verification system or EIV)
- Screening for rental history. In addition to determining whether applicants are likely to meet their financial obligations as tenants and pay rent on time, owners are also interested in whether applicants have the ability to meet the requirements of tenancy.
- Owners must not reject an applicant for lack of a rental history but may reject an applicant for a poor rental history.
- As part of their written screening criteria, and in order to ensure that all applicants are treated fairly, owners should describe the general criteria they will use for distinguishing between acceptable and unacceptable rental history.
- Screening for housekeeping habits. Owners may visit the applicant’s current dwelling to assess housekeeping habits.
- As part of their written screening criteria, and in order to ensure that all applicants are treated fairly, owners should describe the general criteria they will use for distinguishing between acceptable and unacceptable housekeeping practices.
- Owners must establish reasonable standards which can be consistently applied to all families. Messy living quarters are not the same as safety and health hazards.
- In defining the home visit standards, the owner should establish a geographic radius within which home visits are made, and outside of which home visits are not made. It is impractical to establish a policy requiring home visits for all applicants, which might require the owner to visit units many miles from the property. For example, an owner may determine that 50 miles is the maximum distance that can be traveled to visit an applicant at home.
- Consideration of extenuating circumstances in the screening process. Owners may consider extenuating circumstances in evaluating information obtained during the screening process to assist in determining the acceptability of an applicant for tenancy. ** If the applicant is a person with disabilities, the owner must consider extenuating circumstances where this would be required as a matter of reasonable accommodation.** (see also Americans with Disabilities Act)
4-8 Prohibited Screening Criteria
Owners are prohibited from establishing any of the following types of screening criteria.
- Criteria That Could Be Discriminatory Owners must comply with all applicable federal, state or local fair housing and civil rights laws and with all applicable civil rights related program requirements.
- Owners may not discriminate based on race, color, religion, sex, national origin, age, familial status, or disability.
- Owners may not discriminate against segments of the population (e.g., welfare recipients, single parent households) or against individuals who are not members of the sponsoring organization of the property. Owners may not require a specific minimum income, except as allowed by paragraph 4-7 E.3 of this Handbook.
- These prohibitions apply to (1) accepting and processing applications; (2) selecting tenants from among eligible applicants on the waiting list; (3) assigning units; (4) certifying and recertifying eligibility for assistance; and (5) all other aspects of continued occupancy.
- Complaints alleging violations of these prohibitions must be referred to HUD’s Regional Offices of Fair Housing and Equal Opportunity.
- Criteria That Require Medical Evaluation or Treatment
- Owners may not require applicants to undergo a physical exam or medical testing such as AIDS or TB testing as a condition of admission.
- Owners may not require pregnant women to undergo medical testing to determine whether she is pregnant in order to assign a unit with the appropriate number of bedrooms.
- Owners may uniformly require all applicants to provide evidence of an ability to meet the obligations of tenancy, but owners may not impose greater burdens on persons with disabilities. Persons with disabilities may meet the requirements of the lease with the assistance of others, including an assistance animal, a live-in aide, or with services provided by someone who does not live in the unit.
[This section continues with other criteria which include the providing of meals, donations and memberships, and disability. Of course there is also a provision regarding other criteria that cannot be used as put forward by state and local law.]
Additional HUD criteria: Enterprise Income Verification (EIV)
EIV is a web-based computer system containing employment and income information on individuals participating in HUD’s rental assistance programs. This information assists HUD in making sure “the right benefits go to the right persons”. The EIV system provides the owner / manager of the rental property with income information and history for those which are in the HUD system and receiving benefits.
What information is in EIV and where does it come from?
- The Social Security Administration:
- Social Security (SS) benefits
- Supplemental Security Income (SSI) benefits
- Dual Entitlement S benefits
- The department of Health and Human Services (HSS) National Directory of New Hires (NDNH):
- Unemployment compensation
- New Hire (W-4)
- Property owners / managers use the EIV system to determine if applicants:
- Correctly reported their income
- Used a false SSN
- Failed to report or under reported the income of a spouse or family member
- Already receive rental assistance at another property