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Source of Income

Source of Income Law FAQ

A landlord who uses the amount of household income in deciding whether to rent to a prospect can count only the portion of rent the prospective tenant is responsible for in determining if the income is enough.

Example: Jane applies for a unit renting for $1,000/month. Jane’s Section 8 Voucher will cover $600 of the rent. The landlord requires all tenants to have a monthly income that is twice the rent amount. Before, Jane’s income would have to be $2,000 to qualify for the apartment. Under the new law, the landlord must subtract the voucher amount ($600) from the total rent ($1,000) before calculating if Jane’s income is enough. In this case, Jane’s portion of the rent is $400. So 2x Jane’s portion of rent = $800. Jane’s monthly income only needs to be $800 to qualify.

The law also offers help to landlords to recover costs for damages to the apartment. If the tenant has a subsidy like Section 8, and the landlord reports damage the unit, the landlord may be able to get these damages, up to $5,000, paid for by the state.

A landlord can only get money from this state fund (the “mitigation fund”) for damages beyond normal wear and tear. A landlord who gets money from this state fund cannot then go after the tentant for reimbursement for those damages.

A landlord can also use money from the mitigation fund to pay for initial repairs and any rent lost between the time when they agree to rent to a program tenant, and when they actually move in. A landlord who uses the mitigation fund for these things must then rent to that prospective tenant.

What does “source of income” mean?
It includes:

Federal, state, and local public benefits, such as Social Security, Veteran’s benefits, retirement, Temporary Assistance to Needy Families (TANF) or Aged, Blind and Disabled (ABD)

Rent subsidies from federal, state or local housing programs, such as the Section 8 voucher program, Share Aspire or Housing and Essential Needs (HEN)

Short-term rental assistance, for example from organizations like Catholic Community Services or Lutheran Community Services

Penalties

The penalty for violation of this law can be 4.5 x the monthly rent as well as cost and fees.

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