Housing Choice Voucher Program

Overview includes

Roles and responsibilities of Tenant/Landlord and Housing Agency
Fair Market Rents and Utility Allowances and more

The Department of Housing and Urban Development (HUD) provides housing to approximately 1.9 million families through the Housing Choice Voucher Program.

The Housing Choice Voucher Program commonly called the Section 8 Program is the largest subsidized program in the United States.

Program Overview

The Section 8 Program or the Housing Choice Voucher Program is a “Tenant” based rental assistance program funded by HUD (Department of Housing and Urban Development) and administered by local housing agencies (LHA’s). The Housing Agency receives funds for this program through a contract with HUD. The purpose of the program is to provide rental assistance to low-income families in affordable, decent, safe and sanitary housing. A voucher is issued to eligible families which allows the family to seek or look for homes on the private market. Eligibility for the voucher program is based on the family’s household income.

Other preferences or priorities for family eligibility may be established by the Housing Agency. An example would be giving a preference to a family with at least one adult who is working full-time. Regulations for the program state that seventy-five (75%) percent of new lease-ups for the voucher program must be to families earning less than 30 percent of the area median income (AMI).

The voucher covers a portion of the rent and the tenant is expected to pay the balance of rent to the landlord. The tenant’s share of rent is an affordable percentage of their income, which is generally between 30 and 40 percent of their monthly adjusted gross income for rent and utilities.

Families search for an apartment or single family unit in the private market. When families find a unit and the landlord is willing to accept the voucher, the Housing Agency will then inspect the rental unit to ensure it meets the housing quality standards (HQS) of the program. If the unit meets HQS and the rent is determined to be appropriate for the comparable rents for that size unit, and is at or below the Fair Market Rent (FMR), the family and the landlord sign a lease. At the same time, the landlord and the Housing Agency sign a housing assistance payment (HAP) contract that lasts the length of the lease.

Subsidy or rental assistance is paid to the landlord directly by the Housing. Agency on behalf of the eligible family. The family pays the difference between the actual rent charged by the landlord and the amount subsidized by the program.

Landlords must comply with both the lease signed with the tenant and the contract signed with the Housing Agency. If a landlord fails to meet his or her obligations, the Housing Agency may terminate the rental assistance payments. The family is required to comply with the lease and program requirements, pay their share of the rent, maintain the unit in good condition and notify the Housing Agency of any changes in income or family composition. A family can move without jeopardizing its participation in the program as long as they notify the Housing Agency by providing appropriate notice (usually 30 day written notice), terminates its existing lease within the lease provisions and finds acceptable alternate housing, and has complied with all other program guidelines and regulations.

A family participating in the Housing Choice Voucher Program may choose to exercise a “portability” right which allows them to use the voucher outside the boundaries of the issuing Housing Agencies jurisdiction. This means that the family can move anywhere in the United States and its territories where there is a Housing Agency that administers the Housing Choice Voucher Program or Section 8.

Roles and Responsibilities

HUD: Congress allocates funding through appropriation bills or legislation for all housing programs. HUD’s role is to allocate the money to Housing Agencies, develop policy, regulations and other guidance.
LANDLORD: Must sign a lease with the Section 8 Voucher Family. The landlord agrees to provide decent, safe, and sanitary housing, which is documented by HA inspections. The benefit to the landlord participating in the program is the federal government guaranteeing a portion of the rental payment.
TENANT: Must provide the HA with complete and accurate information for income and family composition to determine their eligibility for the program. This information also determines the amount or portion of rent the family pays to the landlord. The tenant/family must find their own housing in the private market. A tenant must pay their portion of the rent, comply with the lease and HUD’s Lease Addendum, and cooperate with the HA for annual inspections and recertification exams. The tenant-based rental assistance voucher program assists families so they are not forced to pay unreasonable amounts of monthly income for rent/utilities.
LOCAL HOUSING AGENCY (LHA): The Housing Agency determines the family’s eligibility for the program; conducts annual inspections of the unit, annual reexaminations of family income and composition; determines the amount of the HAP (Housing Assistance Payment) and the families portion of rent to owner; approves the rental unit; prepares the HAP Contract for Owners; monitors the program for performance and compliance according to HUD regulations and guidelines.

Other Issues Affecting the Section 8 Housing Choice Voucher Program

LOCAL MARKET: Both the cost and availability of units are two principal factors that have the biggest impact for this program.
LANDLORD PARTICIPATION: Landlord participation is determined by the market or the number of units available to Voucher holders. Landlord participation is voluntary on the part of the Landlord.
FAIR MARKET RENTS: FMR’s set by HUD are estimates of rent plus the cost of utilities. These are market-wide estimates of rent subsidy that should be provided to families allowing them to rent standard quality housing throughout the Housing Authorities area or jurisdiction. Utility Allowances are set by the Housing Agency and are based on local utility rates and average consumption for the type of unit the family is residing in or will be moving into.

Other Items that Local Housing Agencies must work with in the Program

40% CAP: Families cannot pay more than 40% of their adjusted annual income for rent.. Therefore, they may have to turn down quality units.
LACK OF FLEXIBILITY IN USE OF HAP (HOUSING ASSISTANCE PAYMENT): HAP’s cannot be used for assisting with Security Deposits, moving expenses, etc.
INCOME TARGETING: HA’s must target Voucher utilization to ensure that 75% of all NEW leases are at 30% of median income or less.
UTILITY COSTS/ALLOWANCES: HA’s are required to annually review utility allowances; utility allowances have increased astronomically, while Fair Market Rents have not. This makes lease up very difficult for both residents and the Housing Agency.
HOUSING UNITS: Tight rental markets prevent lease-ups in the Voucher Program which is a National concern for Voucher utilization.