Here’s a simple, basic overview of how rent works if you have a Section 8 Housing Voucher. Of course, nothing at HUD is ever really simple or basic! HUD has a million more rules and special exceptions. However, before learning the million more rules and special exceptions, it can be helpful to understand the basics.
Basic formula for rent with a Section 8 Voucher if there are no special exceptions or extra rules applied to your case:
Step One: How Much You Pay
🌸 The amount of rent you pay will be 30% of your household income.
🌸 If your landlord pays all utilities, you will pay the full 30%.
🌸 If you pay some or all of the utilities, the amount of your rent payment will be reduced. This reduction is called “utility allowance”.
🌸 House #1 – Landlord pays utilities: Your countable income is $1,000 per month. You pay 30%. You pay $300 per month.
🌸 House #2 – You pay utilities: Your countable income is $1,000 per month. 30% of your income is $300. Your utility allowance is $160. You pay $140, plus you pay utilities.
Step Two: How Much Your Landlord Gets
🌸 Every month, your landlord gets a check from you. Then the landlord gets a second check from the Housing Authority for the rest of the rent.
🌸 Let’s say your income is still $1,000 per month….
🌸 House 1 – Landlord pays utilities. Your payment standard is $1,200. You find a house that costs $1,200 including utilities. You pay $300. The Housing Authority pays $900. The landlord receives a total of $1,200.
🌸 House 2 – You pay utilities: Your payment standard is $1,200. You find a house that costs $1,200 not including utilities. You pay $140 plus utilities. The Housing Authority pays $900. The landlord receives a total of $1,040. Oops! You can’t rent this house unless you use some kind of special rule or exception.
🌸 House 3 – You pay utilities: Your payment standard is $1,200. You find a house that costs $1,040 not including utilities. You pay $140 plus utilities. The Housing Authority pays $900. The landlord receives a total of $1,040.
What About the Million Other Rules and Exceptions?
How to Calculate (and sometimes lower) Rent in Section 8
How Much Rent Do I Pay on Section 8?