How Much Income Do You Need to Qualify for Section 8 Housing?

by R. Lynne
The Department of Housing and Urban Development wants to help all families afford safe and quality housing.

The Department of Housing and Urban Development wants to help all families afford safe and quality housing.

The Housing Choice Voucher program, which is more commonly called Section 8, helps low-income families procure safe and affordable housing. The Department of Housing and Urban Development funds the federal government’s rent assistance program, which is administered by local public housing agencies. The program helps 2.2 million low-income families. In 2013, HUD's budget was slashed by $938 million, reducing the number of families receiving rent assistance in 2014 by 140,000. Families must meet specific income guidelines to qualify for Section 8 housing assistance.

Income Qualifications

Each public housing agency sets its own eligibility requirements for the Housing Choice Voucher program based on the income limits established by HUD for their area. HUD adjusts its income limits according to family size, so the larger the family, the larger the income limits. The income limits vary from county to county; however, the standard program eligibility baseline is set at 50 percent of the local area’s median income. For example, a family of four in Alexander County, Illinois cannot make more than $27,300, which is 50 percent of the county’s median income of $54,600, to qualify for assistance under the program.

Annual Income

A family’s annual income includes alimony or child support, annuity payments, business income, disability or death benefits, gifts, gross wages, insurance proceeds, real or personal property net income, retirement or pension funds, severance pay, Social Security, unemployment benefits, welfare assistance and workers’ compensation. Each family member must submit proof of income, such as paystubs or tax returns, to the public housing agency for income verification. The family’s annual income cannot exceed the median income limits set by HUD. The extremely low income limit is 30 percent, the very low income limit is 50 percent and the low income limit is 80 percent. In Alexander County, Illinois, the annual income for a family of four cannot exceed $43,700, or 80 percent, to receive help.

Fair Market Rent

The local housing market sets the fair market rent, which is the going rent for a moderately priced home. HUD uses this figure to calculate the payment standard, which it sets at between approximately 80 to 100 percent of the fair market rent. Under the Housing Choice Voucher program, a family pays 30 percent of its adjusted monthly gross income towards rent and utilities, and the public housing agency pays the difference. Under the budget cuts, families could see an increase in housing costs. For example, a 10 percent reduction in the payment standard could lead to a $100 a month rent increase, according to the Center on Budget and Policy Priorities.

Local Preferences

By law, public housing agencies must set aside 75 percent of its housing vouchers for extremely low income households. Families in Alexander County, Illinois with incomes at or below $16,400, which is 30 percent of the county’s median income, automatically qualify for assistance. Because of budget restrictions, however, only one in four families receive assistance, according to the Center on Budget and Policy Priorities. Some states, such as Illinois, have placed a moratorium on Housing Choice Voucher program applications. States that still accept voucher applications can initiate local preferences, which reflect that particular community’s housing needs, and allow families who meet these preferences to move ahead of others on the waiting list.

About the Author

R. Lynne has been writing professionally since 1980. Her work has appeared in "Springfield Business Journal," "The Illinois Times," "The State Journal-Register" and "The Hillsboro Journal." She holds a Bachelor of Science degree in anthropology from Illinois State University and a Bachelor of Arts degree in legal studies from Sangamon State University. She writes about business, real estate and health and wellness topics.

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