ANDY CARSWELLUNIVERSITY OF GEORGIA

Housing Vouchers:What They Are and How To

Calculate Them

Overview of the process of Tenant-Based Housing Choice Voucher Program (formerly Section 8) Housing

Source: HUD

Program Eligibility

Be very low-income. Household’s income must be at or below 50 percent of the

area median income as determined by HUD. Be a citizen or a noncitizen with “eligible

immigration status”Be in good standing with federal housing programs.

To be eligible for the Section 8 program, a household must not have: Been evicted from public housing, Been terminated from another Section 8 program for cause, Committed fraud or criminal acts in connection with a federal

housing program, or Failed to reimburse a PHA for unpaid rent or damages, or

currently owe money to a PHA.

How the payments occur in section 8 housing:

PHA Administers the program and

establishes local policies

Household(tenant)

Owner(landlord)

Selects Section 8 household and issues voucher

Provides rent subsidy to

owner

Pays tenant share of rent to owner

What rent will I pay with Section 8?

Most families with Section 8 pay 30% of their monthly adjusted income as the tenant portion of the rent. Section 8 pays the difference between this amount and the

payment standard set by the housing agency. Families pay this amount if they choose housing where the total

rent (rent plus utilities) is less than or equal to the payment standard set by the housing agency.

Some families pay up to 40% of their monthly adjusted income as the tenant portion of the rent. Families pay this amount if they choose housing where the total

rent (rent plus utilities) is greater than the payment standard set by the housing agency.

Families are not allowed to pay more than 40% of their adjusted income when they first get a voucher or whenever they move to a new unit.

What are “fair market rents?”

Each year, the federal government looks at the rents being charged for privately owned apartments in different communities, and the costs of utilities (heat, electricity, etc.) in those communities.

The "fair market rents" are an estimate of the average gross rents (rents plus utilities) for medium-quality apartments of different sizes in a particular community.

What is the “payment standard?”

The "payment standard" is the maximum monthly rent assistance that the government will pay to a landlord who rents to a family with a Section 8 voucher. The payment standard depends on the apartment size and the area

where the rental unit is located.The payment standard is often the same as the fair

market rent, but can be slightly higher or slightly lower. A family with a Section 8 voucher must try to find an

apartment whose rent, including utilities, is not higher than the payment standard. If the rent is higher, the family must pay the extra. If the rent is much higher than the payment standard, the housing

agency will not approve the apartment.

How is adjusted income calculated?

Most households pay 30% of their adjusted (net) income for Section 8 housing.

Adjusted (net) income is your household’s gross (total) income minus the following deductions: $480 for each dependent. Child care expenses for children under age 13 when the

child care is needed so a family member can work, look for work, or attend school.

$400 per household if the head of household or spouse is elderly or has a disability.

Certain disability assistance and medical expenses that are greater than 3% of the gross annual household income.

Example rent calculation:

Background: you and your spouse are not elderly and

do not have disabilities you have three dependent children your gross annual income is $21,500 and you pay $2000 for child care so that

you can work

Example rent calculation:

Deductions: Dependent deduction $480 x 3 = $1440 Child care deduction = $2000

Total deductions = $3440

Example rent calculation:

Net annual income: Equals your gross annual income minus your

deductions: $21,500 - $3,440 = $18,060

Net monthly income Net monthly income equals your net annual

income divided by 12: $18,060 / 12 = $1,505

Example rent calculation:

30% of your net monthly income: Equals .3 * your net monthly income:

.3 x $1,505 = $451.50

Example rent calculation:

You will pay $451.50 per month if you choose housing with a total rent (rent plus utilities) less than or equal to the payment standard. Section 8 will pay the rest.

If you choose housing with a total rent greater than the payment standard, you will have to pay 30% of your monthly adjusted income PLUS the difference between the payment standard and the actual rent. Remember: the total rent that you pay cannot be greater than 40%

of your adjusted income if you are entering the Section 8 program for the first time or moving to a new unit.