Property management & leasing
Housing Choice Voucher: Definition & Example
Also called: Section 8, HCV
What Is a Housing Choice Voucher?
A Housing Choice Voucher, commonly called Section 8, is a federal rental assistance program in which a local housing agency pays part of an eligible household’s rent directly to a private landlord.
What does housing choice voucher mean?
The Housing Choice Voucher program is funded by the U.S. Department of Housing and Urban Development (HUD) and run by local public housing agencies (PHAs). Eligible low-income households receive a voucher, find a unit in the private market, and generally pay about 30% of their adjusted income toward rent. The PHA pays the rest, up to a local payment standard, directly to the landlord.
Before a voucher lease begins, the unit must pass a housing quality inspection and the PHA must approve the rent as reasonable. The landlord signs a Housing Assistance Payments (HAP) contract with the PHA in addition to the lease with the tenant.
In a growing number of states and cities, landlords cannot refuse applicants because they use a voucher. In those places, income requirements are often applied only to the tenant’s share of the rent.
Housing choice voucher example
A household with a voucher applies for a $1,500 apartment. Based on their income, their share is $420 per month, and the housing agency pays the remaining $1,080 to the landlord. Because the city bans source-of-income discrimination, the landlord applies its income requirement to the $420 tenant portion.
Related terms
- Source-of-Income DiscriminationSource-of-income discrimination is treating a rental applicant differently because of where their lawful income comes from, such as a housing voucher, Social Security, child support, or public assistance.
- Fair Housing ActThe Fair Housing Act is a federal law that prohibits discrimination in renting, selling, and financing housing based on race, color, national origin, religion, sex, familial status, or disability.
- Rental CriteriaRental criteria are the written standards a landlord uses to evaluate every applicant, such as minimum income, rental history, credit, and background requirements.
- Rent-to-Income RatioRent-to-income ratio compares monthly rent with gross monthly income, usually shown as a percentage (rent ÷ income) or as a multiple (income ÷ rent).
Housing choice voucher FAQ
- Why is it called Section 8?
- The program comes from Section 8 of the U.S. Housing Act of 1937, as amended. The current tenant-based program is officially the Housing Choice Voucher program.
- Can landlords refuse Section 8 vouchers?
- Federal law does not require landlords to accept vouchers, but many states and cities prohibit refusing applicants because of their source of income, including vouchers.
