Housing Choice Voucher Program

January 22, 2021
Real Estate Insight

Executive Summary

  • Created in the 1970s, the Housing Choice Voucher Program has become the dominant form of federal housing assistance.
  • The voucher program helps 5 million people – most of whom are children, seniors, or people with disabilities – in more than 2 million households pay the rent and make ends meet.
  • Eligibility for a housing voucher is determined by public housing agencies based on the total annual gross income and family size and is limited to U.S. citizens and specified categories of non-citizens who have eligible immigration status.
  • In 2020, the budget for Section 8 funding was $23.9 billion, but only about 1 in 4 households that qualified for Section 8 received assistance due to underfunding.


Created in the 1970s, the Housing Choice Voucher Program has become the dominant form of federal housing assistance.

The Housing Choice Voucher Program (sometimes referred to as the “Section 8 voucher program” after the section of the U.S. Housing Act that authorizes it) is the largest federal low-income housing assistance program. The program is a rental assistance program funded by the U.S. Department of Housing and Urban Development (HUD) to assist families, the elderly, and the disabled afford decent, safe, and sanitary housing in the private market. Participants are free to choose any housing that meets the requirements of the program. Housing choice vouchers are administered locally by public housing agencies (PHA).

The Section 8 program was authorized by Congress in 1974 and developed by HUD to provide rental subsidies for eligible tenant families. The voucher program helps 5 million people – most of whom are children, seniors, or people with disabilities – in more than 2 million households pay the rent and make ends meet[1]. A near-record 8.3 million renter households with very low incomes either pay more than half their income for rent or live in severely substandard housing[2]. Given funding limitations, only one in four households that are eligible for vouchers receive any form of federal housing assistance. Most areas have long and growing waiting lists – in Kansas City the wait time ranges 1-3 years.

The need for housing assistance is very great. According to the National Low Income Housing Coalition report entitled, The Gap: A Shortage of Affordable Homes, the U.S. has a shortage of 7.2 million affordable and available rental homes for extremely low-income renter households, those with incomes at or below the poverty level or 30% of their area median income. In 2018, the average annual household income among tenants in the program was approximately $14,700.

Nearly 11 million households have extremely low incomes, with 46% of extremely low-income renter households being seniors or a householder with a disability. Another 37% are in the labor force, and of those, 43% usually work forty or more hours per week.

People of color are more likely to be extremely low-income renters. 20% of Black households, 17% of American Indian or Alaska Native households, 15% of Hispanic households, and 10% of Asian households are extremely low-income renters. Only 6% of white non-Hispanic households are extremely low-income renters.

[1] Center on Budget and Policy Priorities, “Policy Basics: The Housing Voucher Program,” updated May 3, 2017.

[2] Center on Budget and Policy Priorities, “Strengthening Housing Vouchers Should Be Priority in 2020 Funding Bills,” August 26, 2019.

Extremely Low-Income Renter Households

Who is Eligible?

Housing vouchers are not an entitlement benefit.

Eligibility for a housing voucher is determined by the PHA based on the total annual gross income and family size and is limited to U.S. citizens and specified categories of non-citizens who have eligible immigration status. In general, the family’s income may not exceed 50% of the median income for the county or metropolitan area in which the family chooses to live. By law, a PHA must provide 75% of its voucher to applicants whose income do not exceed 30% of the area median income. Median income levels are published by HUD and vary by location.

The PHA may establish local preferences for selecting applicants from its waiting list. Families who qualify for any such local preferences move ahead of other families on the list who do not qualify for any preferences. Each PHA has the discretion to establish local preferences to reflect the housing needs and priorities of its particular community.

Who is Helped by Housing Choice Vouchers?

Using Housing Vouchers

Once a family receives a voucher, it has at least 60 days to find housing.

A family can apply for a voucher at any of the 2,500 agencies that administer the voucher program. A family that receives a voucher may use it either to help pay the rent of its current unit or to rent a different unit. In either case, the family must lease a unit with the voucher within a fixed period set by the housing agency (agencies must give voucher holders at least 60 days but can give them a longer period) or the family will lose the voucher.

Once a family identifies a unit, the housing agency must inspect the unit to determine that it meets the voucher program’s housing quality standards. In addition, the agency must certify that the rent is “reasonable” and consistent with market rents for similar units in the local area. The agency then signs a contract with the landlord and makes monthly subsidy payments directly to the landlord. The landlord and the family also sign a lease agreement.

A family may use its voucher anywhere in the country where there is a voucher program, except that an agency issuing a voucher to a family that lived outside the agency’s jurisdiction when it applied for assistance can require that the family use the voucher within the agency’s jurisdiction for one year. If a family exercises the option to use a voucher to move beyond the issuing agency’s jurisdiction, the agency in the community to which the family moves takes on administrative tasks such as inspecting apartments and determining that rents are reasonable.

Roles of All Stakeholders

Tenant, landlord, PHA and HUD all have obligations and responsibilities under the voucher program.

Once a PHA approves an eligible family’s housing unit, the family and the landlord sign a lease and, at the same time, the landlord and the PHA sign a housing assistance payments contract that runs for the same term as the lease.

Tenant’s Obligations:

When a family selects a housing unit, and the PHA approves the unit, the family signs the lease with the landlord for at least one year. The tenant may be required to pay a security deposit to the landlord. After the first year the landlord may initiate a new lease or allow the family to remain in the unit on a month-to-month lease.

The family is expected to comply with the lease and the program requirements, pay its share of rent according to the lease, maintain the unit in good condition and notify the PHA of any changes in income or family composition.

Landlord’s Obligations:

The role of the landlord in the voucher program is to provide decent, safe, and sanitary housing to a tenant at a reasonable rent. The dwelling unit must pass the program’s housing quality standards and be maintained as long as the owner receives housing assistance payments. In addition, the landlord is expected to provide the services agreed to as part of the lease signed with the tenant and the contract signed with the PHA.

Housing Authority’s Obligations:

The PHA issues a housing voucher to an eligible family, approves the housing unit, and enters into a Housing Assistance Payment Contract with the landlord to provide housing assistance payments on behalf of the family. If the landlord fails to meet the owner’s obligations under the lease and contract, the PHA has the right to terminate assistance payments. The PHA must re-examine the family’s income and composition at least annually and must inspect the unit at least annually to ensure that it meets minimum housing quality standards.

HUD’s Obligations:

HUD provides funds to allow the PHA to make housing assistance payments on behalf of the families. HUD also pays the PHA a fee for the costs of administering the program and monitors the PHA administration of the program to ensure program rules are properly followed.[1]

Source: The Housing Authority of Kansas City, Missouri

How Much Rent Do Vouchers Cover?

A family with a voucher generally must contribute the higher of 30% of its income.

The amount of rent a voucher can cover is capped by a payment standard set by the housing agency. An agency is allowed to set the payment standard anywhere between 90% and 110% of the fair market rent, which is HUD’s estimate of the amount needed to cover the rent and utility costs of moderately priced housing units in the area.

In simple terms, a tenant pays roughly one-third of their income to the cost of rent and utilities with the Housing Choice Voucher making up the difference.  As illustrated below, if rent was $900 a month the tenant would pay $300 to the landlord each month and the PHA would pay $600 to the landlord each month.

Example of Tenant's Rent

Vouchers Allocation and Funding

Each agency has a cap on the number of vouchers it is authorized to administer.

In any given year, the average number of the agency’s vouchers used by families to rent housing cannot exceed the agency’s number of authorized vouchers. An agency’s number of authorized vouchers is essentially the sum of the vouchers that the agency has been awarded since the start of the voucher program.

Each year, Congress funds new vouchers in addition to renewing existing ones. New vouchers generally receive separate funding allocations in appropriations bills. In most years before 2003, the new vouchers issued included some incremental vouchers, which expand the number of housing subsidies available and thus reduced the unmet need for housing assistance.

The voucher program is funded entirely by the federal government. The annual funding each housing agency receives for existing vouchers is often referred to as voucher renewal funding because it is technically provided through the renewal of an annual contract between HUD and the agency governing the use of voucher funds.

Beginning in 2007, Congress has provided renewal funding for most agencies by multiplying the number of the agency’s authorized vouchers that were in use in the prior year by the actual cost of those vouchers, and then adjusting for inflation and several other factors. Since this policy was adopted, many of the vouchers that were taken out of use during the period of funding instability have begun to be put back to use.

Voucher Program Outlook

Housing should be a right, not a privilege.

President Joe Biden has proposed to spend $640 billion over 10 years so every American has access to housing that is affordable, stable, safe and healthy, accessible, energy efficient and resilient, and located near good schools and with a reasonable commute to their jobs. The plan proposes to provide Section 8 housing vouchers to every eligible family in need so that no one has to pay more than 30% of their income for rental housing.

President Biden’s approach is that Section 8 rental housing assistance program should be fully funded so that everyone eligible gets the assistance they need to pay their rent for a safe home. Over time, this approach is expected to provide assistance to at least 17 million low-income families.

The Biden Principles for Housing


Big plans for housing – but won’t be easy.

The U.S. has plentiful and diverse housing shortcomings, from a Covid-driven renter eviction crisis to over-restrictive zoning laws that artificially drive up land values and make it nearly impossible for entry-level buyers to afford a home. While President Biden’s housing plan might provide some solutions, the massive $640 billon proposal – more than Taiwan’s annual gross domestic product – will not be easy to implement.

Housing goals that require money are typically harder to put into action because Congress needs to approve them. Fully funding the Housing Choice Voucher Program so that everyone who is eligible will receive a voucher is one such example of a longer-term and heavier lift.

In 2020, the budget for Section 8 funding was $23.9 billion, but only about 1 in 4 households that qualified for Section 8 received assistance due to underfunding. In order to accommodate all eligible households, the Section 8 budget would have to expand by nearly $72 billion. Marcia Fudge, HUD Secretary Nominee, is expected to make Section 8 a high priority – but the proposed changes won’t be easy to get through Congress.


Gino Cozza

Founder & Principal