What Is Section 8 Housing?

Section 8 is the informal name for the federal government's housing voucher program designed to assist the elderly, the disabled, and families with very low incomes with paying for housing on the private market. It gives recipients the freedom to select housing in any area location that accepts the vouchers and meets the required standards. However, demand for Section 8 vastly exceeds voucher supplies in most areas, making it difficult to participate.

Although Section 8 is funded by the federal government, specifically the U.S. Department of Housing and Urban Development, it is administered locally by public housing agencies, or PHAs. The required income level to qualify varies based on jurisdiction, as does the waiting list. In theory, housing may be available to those with incomes 50 percent or less of the median family income, or "very low income" in HUD language. Some locations have participants who are "low income," earning 80 percent of the median income.

In practice, however, a PHA must provide at least 75 percent of its vouchers to applicants whose incomes do not exceed 30 percent of the area median income. Your local PHA will verify your income, as well as information on your family's assets and other compensation. Check your local public housing agency for the requirements in your area -- in many cases, that information is available online. The HUD website has the information as well.

The application process for Section 8 vouchers varies by location. In some cases, you can apply online. You'll most likely be placed on a waiting list because of excessive demand. In some jurisdictions, the waiting list is so long that applications aren't being accepted, or there's even a waiting list to get your name on the waiting list. A family may move up on the list if it's homeless or living in substandard housing, if it pays more than 50 percent of its income for rent, or if has been involuntarily displaced from its current home.

The housing voucher program gives participants the freedom to select any housing unit that meets the program's requirements if the landlord accepts vouchers. A voucher can be used for single-family homes, townhouses or apartments, among other housing types, but the property must be appropriate for the household -- a single applicant is unlikely to be approved for a five-bedroom home. The local PHA must approve the dwelling, confirming that it meets a specified level of health and safety standards. After the voucher recipient reaches an agreement with a landlord, the PHA then inspects the unit again to confirm that it still meets the required standards and that the required rent is reasonable. In some cases, the vouchers may be used to help the recipient purchase a home.

A Section 8 renter pays for a portion of her rent on her own, and the local PHA pays its portion directly. Generally, the renting family must pay 30 percent of its monthly adjusted gross income for rent, a number that can rise to 40 percent depending on the difference between the requested rent and the amount of the voucher.