Low-income families and individuals often have trouble finding and maintaining affordable housing. The U.S. Department of Housing and Urban Development (HUD), in partnership with local government agencies called housing authorities, provides several housing assistance programs. The two most popular are the public housing and Housing Choice Voucher, or Section 8, programs. Although the two programs share some characteristics, they have different eligibility rules and provide assistance in different ways.
HUD housing units are federally owned for lower-income families, but the Section 8 lower-income housing program allows tenants to rent private residences approved by local housing authorities.
HUD housing is owned by the federal government. Most HUD housing consists of apartments, although there are some duplexes, townhouses and single-family houses available. Section 8 allows participants to rent private residences, including apartments, condominiums, townhouses, trailers, duplexes and single-family houses.
Income Eligibility Thresholds
To be eligible for HUD housing, tenants must have income that is below 80 percent of the average income in the local housing authority's jurisdiction. People in the Section 8 program can earn up to 50 percent of the average income in the housing authority's jurisdiction.
Local housing authorities set the rent amounts for HUD housing. The monthly rent payment varies depending on the average income in the area, the tenant's income, the type of unit and the number of bedrooms, but the rent usually will not be more than 30 percent of the tenant's income.
The local housing authority does not set rent amounts in the Section 8 program. Instead, Section 8 beneficiaries agree to monthly rent payments with private landlords. The tenant pays 30 to 40 percent of his income in rent to the landlord, and the housing authority pays the remainder.
However, the housing authority places limits on the monthly rent amount. These limits depend on the number of bedrooms of the domicile and the average rent amounts in the area. Some housing authorities allow tenants to pay the difference between the rent threshold and the actual rent amount, but many will not allow tenants to enter into leases if the rent is too high.
Leases With the Housing Authority
People who live in HUD housing sign a lease with the local housing authority. The lease will often include federal, state and local stipulations that the tenant must follow to remain in the HUD housing program. Section 8 tenants sign leases with private landlords. The stipulations of the lease are agreements between the tenant and the landlord and do not include government rules beyond regular lease laws.
Lauren Treadwell studied finance at Western Governors University and is an associate of the National Association of Personal Financial Advisors. Treadwell provides content to a number of prominent organizations, including Wise Bread, FindLaw and Discover Financial. As a high school student, she offered financial literacy lessons to fellow students.