Housing Choice Voucher participation rules, source-of-income law, and HUD inspection requirements
In Tennessee, accepting a Housing Choice Voucher (Section 8) is your choice, not a legal obligation. Tennessee has no statewide source-of-income law, and the Tennessee Human Rights Act (T.C.A. Title 4, Chapter 21, Part 6) protects only the federal classes: race, color, religion, sex, national origin, familial status, and disability. Voucher status is not on that list. On top of that, T.C.A. Sec. 66-35-102 preempts cities and counties from ordering landlords to take vouchers, which is why Memphis's local source-of-income measure never became an enforceable mandate against private owners. So the headline is simple: you can decline vouchers as a matter of policy. But the program itself is federal, the money is dependable, and a couple of things below can still create fair-housing exposure if you handle them carelessly.
Yes, in most cases. Tennessee has no statewide source-of-income (SOI) protection law. Landlords may decline applicants who hold Housing Choice Vouchers without violating state law. However, federal Fair Housing Act protections still apply: landlords cannot use a Section 8 refusal as a pretext for race, national origin, or familial status discrimination patterns of disproportionate voucher refusals in certain demographics may be actionable under HUD's disparate impact standard.
No. Tennessee is one of the states with no source-of-income protection at the state level. The governing anti-discrimination statute, the Tennessee Human Rights Act (T.C.A. Title 4, Chapter 21, Part 6, starting at Sec. 4-21-601), tracks the federal Fair Housing Act almost word for word. It bars discrimination based on race, color, religion, sex, national origin, familial status, and disability. It does not mention Section 8, vouchers, or lawful source of income.
Local governments cannot fill that gap. T.C.A. Sec. 66-35-102, best known as Tennessee's prohibition on municipal rent control, was expanded so that no city or county may force private landlords to lease to, or accept payment from, tenants they would not otherwise choose. That preemption is the reason Memphis's source-of-income effort could not be enforced as a binding mandate against private owners. The practical result: in Nashville, Knoxville, Chattanooga, Clarksville, and everywhere in between, taking a voucher is a business decision, not a legal requirement.
Declining vouchers is legal, but how you decline still matters. The federal Fair Housing Act (42 U.S.C. Sec. 3601 and following) reaches conduct that has a discriminatory effect on a protected class even when the stated policy is neutral. If, in your particular market, voucher holders are disproportionately members of one race or are overwhelmingly families with children, a rigid blanket refusal can be challenged as disparate impact, and HUD will investigate that claim in Tennessee just as it would in a source-of-income state.
Two practical traps: first, do not tie a voucher refusal to any protected characteristic in your advertising or your conversations, because that turns a lawful business preference into evidence of intent. Second, apply the same screening criteria (income multiples, credit, rental history) to voucher applicants that you apply to everyone else; carving out a harsher standard for voucher holders is where effect claims gain traction. A clean, consistently applied policy is your best protection.
The Housing Choice Voucher program is federal, run under 24 C.F.R. Part 982 by local Public Housing Authorities (PHAs). In Tennessee, the Tennessee Housing Development Agency (THDA) administers the statewide balance-of-state program, while the larger metros run their own authorities, including the Memphis and Nashville housing authorities. You will deal with whichever PHA issued your tenant's voucher.
The sequence rarely changes. Your applicant brings a voucher and a request-for-tenancy packet. You agree on rent. The PHA runs a rent reasonableness review, comparing your asking rent to unassisted comparable units so the subsidy is not overpaying the market. The PHA then inspects the unit (see below). Once it passes and the paperwork clears, you sign a Housing Assistance Payments (HAP) contract with the PHA and your own lease plus a HUD Tenancy Addendum with the tenant. The addendum controls if it ever conflicts with your lease. Ordinary Tennessee landlord-tenant law under the Uniform Residential Landlord and Tenant Act (T.C.A. Title 66, Chapter 28) still governs the tenancy in URLTA counties.
Two mechanics catch new landlords off guard: the inspection and the rent cap.
Inspection. Before any money moves, the PHA inspects your unit against HUD Housing Quality Standards (HQS) under 24 C.F.R. 982.401, checking basics like working smoke detectors, heat, hot water, sound windows and locks, and no peeling paint in older units. The unit must pass before the HAP contract is signed, and the PHA re-inspects periodically during the tenancy. HUD has been moving these inspections to its newer NSPIRE standard, so expect the specific checklist to keep evolving; the concept, a unit that meets a minimum condition floor, does not.
Rent cap. Your rent is bounded by the PHA's payment standard, which each PHA sets within a band around HUD's published Fair Market Rent (FMR) for that metro or county. The tenant generally pays about 30 percent of adjusted household income toward rent and utilities, and the PHA pays the rest directly to you as the HAP. The exact FMR figures and the tenant/PHA split are set by household income and your local PHA and change annually, so confirm current numbers with the PHA rather than assuming last year's amounts.
On the plus side: the PHA's share of rent arrives on time, by direct deposit, every month, which insulates most of your cash flow from a tenant job loss. Voucher demand is deep in Tennessee metros, so units fill quickly, and vouchers can shorten vacancy in softer submarkets. The tenant has a strong incentive to keep the unit and comply, since losing the tenancy can mean losing the voucher.
On the minus side: the up-front HQS inspection can delay move-in and may require repairs before you see the first check, and re-inspections add periodic friction. The payment standard can cap your rent below what an unassisted tenant would pay in a hot Nashville or Chattanooga submarket. And the paperwork, the HAP contract, the addendum, and annual recertifications, is real administrative overhead. None of it is required in Tennessee, so weigh the steady, subsidized cash flow against the added process and decide unit by unit.
Advantages:
Potential drawbacks:
Tennessee has one or more Public Housing Agencies (PHAs) that administer Housing Choice Vouchers. Contact your local PHA to register as an HCV landlord, verify current payment standards, and submit a Request for Tenancy Approval (RFTA). The HUD PHA directory lets you search by state and county:
HUD PHA Directory, Tennessee →
This guide reflects Tennessee statutory law, including the Tennessee Human Rights Act (T.C.A. Title 4, Chapter 21, Part 6) and the local-preemption provisions of T.C.A. Sec. 66-35-102, together with the federal Housing Choice Voucher rules at 24 C.F.R. Part 982 and the Fair Housing Act (42 U.S.C. Sec. 3601 et seq.). Program mechanics such as payment standards, Fair Market Rents, and inspection standards are set and updated by HUD and by your local Public Housing Authority, so confirm current dollar figures and the applicable inspection standard (HQS or NSPIRE) with the Tennessee Housing Development Agency or the PHA that issued the voucher before signing a HAP contract. This is general information for landlords, not legal advice; for a specific dispute, consult a Tennessee attorney.
No. Tennessee has no state source-of-income law, and the Tennessee Human Rights Act (T.C.A. Title 4, Chapter 21, Part 6) does not protect voucher status. Accepting a Housing Choice Voucher is voluntary statewide.
No. T.C.A. Sec. 66-35-102 preempts local governments from forcing landlords to lease to or accept payment from tenants they would not otherwise choose. That is why Memphis's local source-of-income measure could not be enforced as a mandate on private owners.
Refusing vouchers is legal, but the federal Fair Housing Act (42 U.S.C. Sec. 3601 et seq.) still applies. A blanket refusal can be challenged under a disparate-impact theory if it disproportionately excludes a protected class such as one race or families with children, and HUD can investigate that claim in Tennessee.
It is a federal program under 24 C.F.R. Part 982, administered by local Public Housing Authorities. The Tennessee Housing Development Agency (THDA) runs the statewide balance-of-state program, and metros like Memphis and Nashville operate their own housing authorities.
Before the tenancy starts, the PHA inspects your unit against HUD Housing Quality Standards under 24 C.F.R. 982.401. It must pass before the HAP contract is signed and subsidy is paid, and the PHA re-inspects periodically. HUD is transitioning these to the newer NSPIRE standard.
The tenant generally pays about 30 percent of adjusted household income, and the PHA pays the balance directly to you as the Housing Assistance Payment. Your total rent is capped by the PHA's payment standard, which is set within a range of HUD's Fair Market Rent for your area and adjusted annually.
SOI protection status sourced from published Tennessee fair-housing statutes and HUD Housing Choice Voucher Program regulations (24 C.F.R. Part 982). Last updated July 14, 2026. This page is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for your specific situation.
