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.
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
- tips and bonuses
- 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.
Calculating Monthly Gross Income
Divide the annualized gross household income by 12 to get the family's monthly income. For example, suppose the gross income for a typical Section 8 recipient's household is $16,000 per year. Divide $16,000 by 12 to get gross monthly income of $1,333.
Deducting Allowances from Gross Income
Deduct certain Section 8-approved allowances from the annual gross income to get an annual adjusted income. As of publication, the following allowances are acceptable:
- $480 for each dependent
- $400 for one elderly or disabled family member
- Reasonable and non-reimbursed annual child-care costs
- Certain non-reimbursed medical expenses
Total all of these allowances and subtract it from the annual gross income to get the annual adjusted income. For example, if a household makes $16,000 per year and has $2,000 in allowances, its annual adjusted income is $14,000.
Calculating Monthly Adjusted Income
Divide the household's annual adjusted income by 12. For example, an adjusted annual income of $14,000 yields a monthly adjusted income of approximately $1,167.
Figuring Out a Tenant's Rent Payment
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.