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Section 8 guide

How Section 8 rent is calculated

With a voucher you pay roughly 30% of your adjusted monthly income toward rent and utilities, and the housing authority pays the rest to the landlord, up to its payment standard. These are the pieces of the formula.

Agencies by state

1. Your adjusted income

The agency starts from your gross yearly income and subtracts deductions set by HUD: a fixed amount for each dependent, a fixed amount if the head of household or spouse is elderly or disabled, medical and disability expenses of elderly or disabled families above 10% of annual income (the threshold HUD raised from 3%, phased in with hardship relief), and childcare costs needed to work or study. HUD updates the fixed deductions every year.

2. Total tenant payment

Your total tenant payment (TTP) is the highest of: 30% of adjusted monthly income, 10% of gross monthly income, or the agency's minimum rent (up to $50). That is what your household is expected to pay for rent plus utilities.

3. Payment standard and gross rent

The agency sets a payment standard for each bedroom size, usually 90% to 110% of HUD's Fair Market Rent. Gross rent is the rent of the unit plus a utility allowance for the utilities you pay yourself.

The voucher pays the lower of the payment standard or the gross rent, minus your TTP. If the gross rent is above the payment standard, you pay the difference too.

4. The 40% rule

When you first rent a unit whose gross rent is above the payment standard, your share cannot exceed 40% of your adjusted monthly income. If the unit is too expensive for that, the agency will not approve it.

Example

ItemAmount
Adjusted monthly income$1,800
Total tenant payment (30%)$540
Payment standard (2 bedrooms)$1,500
Unit rent$1,300
Utility allowance$150
Gross rent$1,450
Housing authority pays the landlord ($1,450 − $540)$910
You pay the landlord ($1,300 − $910)$390
You pay utilities$150

You end up paying $540 a month for rent and utilities, exactly your 30% share, because the gross rent is under the payment standard.

Frequently asked questions

Is Section 8 rent always 30% of income?

Roughly: it is 30% of adjusted income (after deductions), or more if you choose a unit whose gross rent is above the payment standard. It can also be the minimum rent if your income is very low.

What happens to my rent if my income changes?

You must report changes as your agency requires. Your share is recalculated at least once a year and, in many cases, when income changes during the year.

Does Section 8 pay utilities?

The voucher includes a utility allowance for the utilities you pay. If the allowance is larger than your total share, the agency pays you or the utility company the difference.

More Section 8 guides

How to apply for Section 8Step by step, from finding your agency to the briefing.Section 8 waiting listsHow lists open, preferences and how to check your status.Section 8 eligibility requirementsIncome, citizenship, background and household rules.Documents you need to applyThe checklist housing authorities ask for.Public housing vs. Section 8Which program fits you and how each one works.Moving with a voucher (portability)How to take your Section 8 voucher to another city or state.Section 8 inspection checklistWhat inspectors check before you can move in.

Official sources: 24 CFR Part 5 (income, eligibility and screening rules) · 24 CFR Part 982 (Section 8 tenant-based assistance) · HUD USER: Fair Market Rents. Written and reviewed by Agustin Mendez. How we check the information.