You may already know that Section 8 is a housing choice voucher program managed by the U.S. Department of Housing and Urban Development (HUD). The program helps low-income households afford rent in the private market by paying landlords on those households’ behalf. But how much does Section 8 pay?
There’s no one answer to that question, since Section 8 vouchers are calculated based on variables such as local rent levels and the household’s income. But here’s a primer on those calculations, plus information on Section 8 income limits for fiscal 2022.
How much does Section 8 pay?
According to The Balance Small Business, the amount paid by Section 8 vouchers depends on numerous factors, including the fair market rent, payment standard, tenant portion, and allowance for utilities. The HUD calculates fair market rent as “estimates of 40th percentile gross rents for standard quality units within a metropolitan area or nonmetropolitan county,” meaning an estimated 40 percent of units rented in the area are rented for less than the fair market rent.
The payment standard is the maximum monthly assistance payment for a household assisted by the voucher program, before deducting the total tenant payment by that household, according to the HUD. The payment standard is set by the local public housing authority (PHA) based on localized factors, but the basic range of the payment standard is 90 to 110 percent of the fair market rent.
The tenant portion is the amount of rent that the household must pay. According to The Balance Small Business, this tenant portion is the highest of four amounts: 30 percent of monthly adjusted income, 10 percent of monthly gross income, the welfare rent, and the PHA’s minimum rent amount. For example, New York City’s Section 8 program covers one-bedroom apartments with rents of $1,945 per month and two-bedroom apartments with rents of $2,217, according to City Limits.
What are the Section 8 income limits in 2022?
The HUD is required to set income limits for applicants of its assisted housing programs, as the department explains in a document on the methodology for determining Section 8 income limits. For Section 8, those income limits are based on median family incomes in each area, as determined by fair market rent area definitions.
The HUD defines low-income families as those whose incomes are no more than 80 percent of the median family income for the area, very low-income families as those whose incomes are no more than 50 percent of the median family income for the area, and extremely low-income families as those whose incomes are no more than either 30 percent of the median family income for the area or the federal poverty guidelines published by the Department of Health and Human Services, whichever is greater.
The department offers income limit documentation for fiscal 2022 on its website, which includes a query tool. In New York City, for example, the fiscal 2022 extremely low-income limit is $28,000 for a family of one, $32,000 for a family of two, $36,000 for a family of three, and $40,000 for a family of four.