The loophole came to light when it was discovered that a high percentage of real property tax delinquencies had tenants and landlords with similar names. A retired couple could deed their home to an adult child and then apply to the Section 8 program for a subsidy because their income was less than the program limit. Applicants must be income eligible. They must be on a housing waiting list for two to five years. Rentals are below fair market rate established for the region.
Rentals are reasonable compared to comparable unassisted rental housing in region.
HUD inspected the housing units before granting subsidy and annually thereafter. Units meet HUD standards for health and safety.