- February 25, 2015
Housing Choice Voucher Program Q&A
What is the Housing Choice Voucher program?
The Housing Choice Voucher (voucher) program is HUD’s largest rental assistance program, assisting more than five million people in 2.1 low income households find affordable housing. Eligible households use vouchers (also called tenant-based Section 8 rental assistance) to help pay the rent on privately owned homes of their choosing. Additionally, program administrators can attach a portion of their vouchers to particular properties or help eligible households buy homes.
Whom do vouchers serve?
Households with vouchers, on average, have annual incomes of $13,138 and over three-quarters of these households are extremely low income, at or below 30 percent of area median income (AMI) or the federal poverty line. Additionally, nearly half (48 percent) are families with children; 24 percent are headed by a senior or elderly person; and 22 percent include a person with a disability.
How do vouchers work?
Federal rules require that at least 75 percent of households newly admitted to the voucher program be extremely low-income. The remainder of eligible households must have incomes at or below 80 percent of AMI.
A household receiving a voucher must pay at least 30 percent of its monthly adjusted gross income for rent and utilities. The difference between the actual rent and what the tenant can afford is paid by HUD through the household’s voucher. If the unit rent is greater than the payment standard for the area, as determined by the state or local public housing authority (PHA), the household is required to pay the additional amount.
Vouchers are used primarily for tenant-based rental assistance; however, some vouchers may be used to help home buyers pay closing costs or mortgage payments. Program administrators can also dedicate up to 20 percent of their vouchers for eligible families occupying pre-selected apartments, which is known as project-basing the vouchers. Program administrators may not provide project-based vouchers to more than 25 percent of the apartments in an individual multifamily housing development.
Who administers the voucher program?
With oversight from HUD, approximately 2,300 state and local public housing authorities (PHAs), including state Housing Finance Agencies (HFAs), administer voucher programs. Funding provided by Congress is distributed to these agencies by HUD based on the number of vouchers in use in the last year, the cost of vouchers, an increase for inflation, as well as other adjustments. PHAs solicit applications, determine recipient eligibility, establish allowable rent levels, review recipients’ income, and determine whether homes for rent comply with the voucher program’s housing quality standards. Approximately 700,000 private rental property owners are program stakeholders.
What is the current funding level for vouchers?
In FY 2015, Congress provided $19.3 billion for the voucher program, including $17.5 billion for voucher renewals and $1.5 billion for administrative fees. This is $127 million more than the voucher program received in FY 2014 level but still less than half of the funds needed to replace 67,000 vouchers lost during sequestration. The Administration’s FY 2016 Budget seeks to restore this number of vouchers
with $277 million for new need-based vouchers; $178 million for new vouchers for families, veterans, and tribal families experiencing homelessness; $38 million for new vouchers for victims of domestic violence; and $20 million for new family unification vouchers.
What should Congress do to improve this program?
Congress should work to provide sufficient funding to renew all authorized vouchers and support new ones in FY 2016. They can further strengthen the program by passing Section 8 reform legislation including provisions to streamline income determinations, add flexibility for project-basing vouchers, and expand the Moving-to-Work (MTW) program.