Section 8 is a federal housing subsidy program that provides a path for people in tight financial situations to rent a qualifying home for a fraction of normal rent rates. More than 2 million Americans participate in this program, according to the Center on Budget and Policy Priorities.
If your finances are strained, you may want to learn more about Section 8 as a way to find a safe home in a desirable neighborhood for a fraction of the usual rent.
How Section 8 Housing Works for Renters
Your local PHA administers the program and if you are approved for a Section 8 voucher, and a home that accepts it, your rent amount should only be 30% of your monthly income. The government will then pay the difference to the landlord.
These housing discounts can have a significant and positive impact on the finances of those with vouchers. For instance, let’s say your rent is $2,000 and your monthly income is $1,700.
With a Section 8 housing voucher, you would only be required to pay 30% of your income which, in this case, is only $510. That’s $1,490 in savings that could go towards food, transportation and other essentials.
With such a benefit, Section 8 is a highly sought-after program, so desirable that you’ll usually find a waiting list for vouchers. Still, the wait may be worth it for those who see vouchers as a better choice than living in subsidized housing projects in potentially bad neighborhoods.
Two Types of Section 8 Housing Vouchers
Two specific types of Section 8 housing vouchers exist, one that is connected to the tenant, and one that links to the property.
Tenant-Based Housing Voucher
The tenant-based voucher option is also known as the Housing Choice Voucher and it is attached to you. So long as you remain qualified for Section 8 assistance, you may continue to receive the subsidy.
You can use the voucher on any rental property that accepts it and that meets the PHA standards requirements. You may find, however, that properties that accept vouchers are limited. As such, you’ll need to practice patience until you find a property that meets your needs.
Project-Based Housing Voucher
The Project-Based Voucher is assigned to a specific property. The property owners reserve units for Section 8 tenants after receiving a fixed number of vouchers per year from the PHA.
What’s important to note in this scenario, is that if you are a tenant and then move out, the subsidy remains with the property and doesn’t go with you to your next home.
These types of Section 8 units are also very popular. If there are no housing vacancies, you’ll have to wait for a tenant to leave and for your name to be called from the waiting list.
Section 8 Housing: A Deeper Look
While the prospect of obtaining Section 8 housing is a relief to financially challenged households, the reality is that vouchers can be challenging to obtain. Many property owners and landlords do not participate in the program.
Landlords may not want to deal with the restrictions that are involved. They can not charge more than fair market rent for the area, for instance, and the PHA puts limits on what they will pay.
You’ll find that extensive paperwork is involved and not necessarily straight-forward. In particular, determining your income is complicated as it comes with specific additions and subtractions.
Don’t be surprised to find a waiting list due to high demand. Often, the demand is so high these waiting lists are closed to new applicants. It’s wise to take a long view and understand that getting Section 8 approval may be a lengthy process that requires patience.
Requirements to Qualify for Section 8 Housing
Applicants must meet four criteria to be eligible for a Section 8 voucher:
- Income
To qualify for Section 8 housing, you must have an annual gross income that falls into a “low-income” bracket for the area you want to live in. The income figure includes many variables in the calculation, such as job earnings, child support, disability funds, retirement funds, welfare, Social Security and more. For a complete list of income sources and income exclusions, review HUD’s Housing Choice Voucher Guidebook.
HUD issues income levels every year and breaks them down into three tiers. The precise income levels vary by area because they are determined as a percentage of each area’s median income.
The three income tiers are:
- Extremely Low Income: Income is 30% of the median income level
- Very Low Income: Income is 50% of the median income level
- Low Income: Income is 80% of the median income level
Note the income calculations come with many exceptions, such as:
- Adjustments for high housing costs as it relates to your income.
- The implementation of state nonmetropolitan income limits in low-income areas.
- National maximum limits in high-income areas.
Section 8 vouchers priority is given to those who need it most — those in the extremely low-income category. Very low-income status is next in line followed by those in the low-income category.
- Family Status
Each Section 8 applicant must meet HUDs definition of a family. While HUD has its own general family status guidelines, they also give flexibility to each local Public Housing Authority over the specific definition of a family.
HUD uses the terms “family” and “household” interchangeably. In other words, the family requirement applies to all people living in the same home even if they are not related. Single people are eligible and you do not have to have children to qualify.
Other criteria are considered as well, including whether disabled individuals or people over the age of 62 live in the household.
If you are unsure of what your family status may be, contact your local PHA.
- Citizenship
For the citizenship requirement, you must be a legal U.S. citizen or an eligible immigrant. You also must be able to provide documentation which can be verified.
If you are a U.S. citizen, you are required to sign a statement that all families — those who are on your Section 8 application — are United States citizens. Local PHA may also verify each individual’s citizenship and want a U.S. passport, Social Security card or other documents.
If you are an eligible immigrant, the PHA will ask you to
- Sign a statement declaring your eligible immigration status.
- Provide INS documents proving your immigration standing.
- Verify information with INS.
- Sign a consent form allowing the agency to use your information.
- Eviction History
HUD will reject any applicants who have been evicted from any property in the previous three years due to a serious lease violation.
They also disqualify anyone convicted of producing methamphetamine in an assisted housing project.
How to Apply for Section 8 Housing
To be considered for Section 8 housing vouchers, submit an application at your local public housing authority or HUD office. Once the review of your paperwork is complete, you may be accepted, or rejected for a housing voucher. Another common result it to be added to a wait list, with wait times ranging from several months to several years.
If you are approved for a housing voucher, you may begin searching for qualified housing. With your tenant-based voucher in hand, you can look at any rental property so long as the landlord accepts Section 8 tenants.
You’ll pay your portion of the rent and the PHA will pay their percentage to the landlord.
If you receive a project-based voucher, you have nothing to do but wait for Section 8 units to become available.
Frequently Asked Questions About Section 8 Housing
Can poor credit hurt my chances of getting housing vouchers?
While HUD does not check your credit to approve your Section 8 assistance application, the property owner likely will. HUD mandates that landlords can reject an applicant for poor credit history, however, they may not reject someone with a lack of credit history. In other words, someone with no credit may have an easier time finding a Section 8 home than someone with poor credit.
Can I move and keep receiving housing voucher assistance?
The Housing Choice Voucher program allows families to move without losing their housing assistance. The family must notify the PHA before moving and terminate its current lease and find suitable housing that accepts Section 8 vouchers.
Are you required to satisfy all four requirements to qualify for Section 8?
Applicants must satisfy the four requirements listed above to be eligible for a Section 8 voucher. Also, each PHA requires that certain family commitments are met, otherwise a family may be denied vouchers. A complete list of obligations can be found in the Housing Choice Voucher Guidebook.
The Bottom Line
Section 8 housing may provide you with an affordable way to live in a nice home in a safe neighborhood. If you do receive housing assistance, take the opportunity to understand your financial health. You can start by getting your credit scores and reports. Then, when you are ready, you’ll be able to rent or buy a home on the open market.
