Section 8 refers to the Housing Choice Voucher Program, a federally funded program that seeks to help low-income families rent housing in the private market. The Housing Choice Voucher Program is administered at the federal level by the Department of Housing and Urban Development (HUD) and at the state local level by Public Housing Agencies (PHA).
The PHA determines eligibility to participate in the program based on the total annual gross income and family size. Participants must be US citizens or another specified category of non-citizens who have eligible immigration status. In general, the participant’s income may not exceed 50% of the median income for the county or metropolitan area in which the participant chooses to live.
Participants may freely choose to live in single-family homes, townhouses, and apartments that meet the program requirements, to the extent that the program is not limited only to properties located in subsidized housing projects. The PHA will advise participants about the size of the housing unit according to its family size and composition. In any case, the housing unit selected by the participant must meet the acceptable level of health and safety conditions the PHA establishes.
When the participant finds the housing unit and reaches an agreement with the landlord over the lease terms, the PHA will inspect the property and determine if the requested rent is reasonable under the rent payment standard. The PHA will establish the rent payment standard by calculating the amount generally needed to lease a moderately-priced housing unit in the local housing market. Such a payment standard will be used as the basis to calculate the amount of housing subsidy the participant will receive. However, the rent payment standard does not limit the amount of rent a landlord may charge or that the participant may pay. The participant may select a housing unit with a rent that is below or above the rent payment standard determined by the PHA.
The PHA calculates the maximum amount of rent subsidy allowable, which is the lesser between:
- The payment standard minus 30% of the participant’s monthly adjusted income; or
- The gross rent for the housing unit minus 30% of the participant’s monthly adjusted income.
The participant must pay 30% of its monthly adjusted gross income for rent and public utilities. If the monthly rent of the leased housing unit is greater than the payment standard, the participant will have to pay the additional amount. The PHA pays the housing subsidy to the landlord directly on behalf of the participant. The participant pays the difference between the rent charged by the landlord and the amount subsidized by the program. Under special circumstances, the PHA may authorize that the participant uses the subsidy to purchase a modest home.
Finally, the PHA may authorize a participant to move to another acceptable housing without losing the subsidy, provided that the participant notifies the PHA on a timely basis and legally terminates the existing lease.
[Last updated in July of 2021 by the Wex Definitions Team]