The Section 8 Housing Choice Program allows low-income households to obtain decent housing for only a fraction of the regular rental rate. The Department of Housing and Urban Development, in partnership with the local housing authorities, subsidizes the remaining monthly rent. Tenants typically pay 30 percent to 40 percent of their income towards a Section 8 rental. Obtain the household's annual income and make adjustments to calculate a Section 8 tenant's rent.
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Totaling a Household's Annual Income
A family's household income must include the earnings of all household members older than 18 years of age. This includes, but is not limited to, wages and salaries, overtime pay, fees, tips and bonuses, and pay and allowance for Armed Forces members. Social Security, retirement, pension funds, disability and death benefits, alimony and child support also count toward income. Add up all of the income — before payroll deductions — projected for the following 12-month period to get the annual gross household income. Welfare payments designated for a family's shelter and utilities are considered household income, but some types of welfare payments — such as payments from welfare agencies for the care of foster children — do not count.
Monthly Gross Income and Allowances
Divide the annualized gross household income by 12 to get the family's monthly income. For example, suppose the gross income for a typical
Figuring Out a Tenant's Rent Payment
Divide the household's annual adjusted income by 12 to arrive at the adjusted monthly income. For example, an adjusted annual income of $14,000 yields a monthly adjusted income of approximately $1,167. Section 8 recipients pay the higher of 30 percent of their monthly adjusted income or 10 percent of their monthly gross income. Calculate each figure to determine which is higher. For example:
$1,167 * .30 = $350.10
$1,333 * .10 = $133.30
The household's portion of the rent on a Section 8 property may not exceed $350.10. The housing authority covers the difference between the agreed-upon monthly rent on a lease and $350.10. It's important to note that housing authorities set rent limits for units available to Section 8 tenants. Should the rent amount on a unit exceed the authority's allowed rental amount, the tenant may be required to pay more for the rental. Instead of paying 30 percent of their income toward rent, they may have to pay 40 percent of their adjusted monthly income.