How Section 8 Housing Works

The Section 8 program has its roots in the Great Depression. In 1937, Congress passed the U.S. Housing Act, which represented the beginning of federal housing assistance in the United States. It provided funds to develop high-quality public housing units for low-income tenants. Local public housing authorities maintained and managed the units.

In 1961, the Housing Act was amended to create the Section 23 Leased Housing Program. Under this program, qualified low-income tenants were placed in private units leased by local housing authorities. Tenants paid a portion of the rent, and the housing authorities paid the difference between what the tenants paid and what the building's owner might have received in the open market. The housing authorities also maintained the buildings.

The Act was amended again in 1974 to create Section 8. This new law signified a switch in focus. Instead of developing and managing public housing, it sought to help low-income people who were spending too large a percentage of their earnings on housing. Federal funds now paid a share of rent in units renters chose on the open market. Since 1974, legislation has refined and restructured the Section 8 program several times.

Today, people who qualify for Section 8 assistance receive a voucher that pays for about 70 percent of rent and utilities. The renter is then responsible for paying the remaining 30 percent. Recipients may choose to live wherever they want, as long as the total rent falls within standards set by HUD.

The voucher program currently helps about 2 million American households pay rent. In addition, vouchers may sometimes be used to help low-income people make mortgage payments or buy a house.

Research seems to indicate that the Section 8 program is a success. It helps many families live above the poverty line, spend money on food and health care rather than rent, and improve their well-being. It helps families move into better, more stable neighborhoods. It substantially reduces homelessness, especially for families with young children. Surprisingly enough, it also reduces incidences of mental health problems such as depression [source: Center on Budget and Policy Priorities].

Does Section 8 sound like it might be right for you? Learn how to qualify on the next page.

Because Section 8 is not considered an entitlement benefit, everyone who qualifies for a housing voucher doesn't necessarily receive one. According to recent estimates, only about 25 percent of the families qualifying for aid receive it. In many areas, qualified families face fierce competition for vouchers. Waiting lists are often long. Because of huge demand, some local housing authorities have even stopped accepting applications entirely. For example, over 2,300 families are on Chicago's waiting list. Recipients are chosen from the waiting list by a monthly lottery; until the list is exhausted, the application process is closed [source: Chicago Housing Choice Voucher Program].

These realities aside, if you are in a low-income group and you need rent assistance or other aid under the voucher program, you should first determine if you meet some basic income requirements. Income requirements vary from one area to the next, but in general your family will need to earn no more than 50 percent of the median income in your area. HUD estimates different areas' median incomes every year.

In 2007, the national median income for a family of three was about $52,000. So, to qualify, your family of three would have to earn less than $26,000 a year. Remember, this limit applies to total household income -- all the income earned by everyone in the household combined.

Another consideration is the number of people in your family. The fewer people in your household, the lower your Section 8 income limit.

HUD and its local agencies also consider other factors when determining applicants' eligibility. Homelessness and factors unique to certain locations (such as participation in a local welfare-to-work program) are often taken into consideration. Other criteria that may help you qualify include:

Local housing agencies must also give preference to extremely low-income families, those with household earnings less than 30 percent of an area's median income. Of the new applicants admitted to the program each year, 75 percent must be extremely low-income.

If you think you qualify for a Section 8 housing voucher, you should contact the public housing agency in your area. Contact information, including toll-free phone numbers, addresses and e-mail addresses, can be found on the HUD Web site. Remember, no one should ever charge you for a Section 8 application. Anyone who sells an application or a voucher is committing fraud.

If you'd like to learn more about Section 8, you can follow the links on the next page.