Purpose of Section 8

Through the Housing Choice Voucher Program and Section 8 of the Federal Housing Act, the U.S. Department of Housing and Urban Development (HUD) is permitted to distribute federal funding to public housing agencies via Housing Choice Vouchers. These housing agencies then can provide access to affordable private housing aided by these Housing Choice vouchers to local families and individuals considered eligible for receiving assistance.

Before assessing an application, housing agencies will first discern if the applicant(s) qualifies on account of:

  • Household or individual income (see Family Income Limits);
  • U.S. citizenship status;
  • Those considered elderly (refer to Section 202);
  • Those who qualify as disabled (refer to Section 811).

Family Income Limits

Section 8 dictates that families and individual persons aged 18 or older who seek affordable private housing through the Housing Choice Voucher Program must meet qualifying income limits in order to apply.

The HUD guidelines of income eligibility are measured in relation to the average income of individual housing districts. Public housing agencies distribute vouchers to families or persons who are in the:

  • lower-income bracket—with an annual income of 80% or less than the average;
  • very low-income bracket—with an annual income of 50% or less than the average.

In order to comply with HUD requirements, it is the responsibility of each Public Housing Agency to distribute 75% of their district’s voucher to eligible households with an annual income of 30% or less than the local average.

Even if you meet these fundamental income requirements to apply, housing agencies reserve the right to approve or disapprove your application on a number of factors specific to your area’s restrictions and protocol for public housing tenants.

These limitations on eligible household income will also decide the cost of your rent charges in the case your application is approved.

Tenant and Applicant Responsibilities

If you think you meet these qualifying standards for receiving assistance and you’re prepared to complete the written application—in addition to supplying sufficient, accurate documentation—get in touch with a public housing agency in your area.

In the case your application is approved, your local housing agency will add your family to a waiting list. When your agency contacts you with a housing offer, you choose to accept, and you sign the property lease, you will be expected to maintain your responsibilities as a tenant.

Tenants are required to comply with HUD standards and your local agency’s protocol for lease requirements, property-specific guidelines, and providing relevant documentation of your income and the number of people in your family.

Valid and current documentation should be submitted to your housing agency once a year or any time there is a change in your income or household composition.

Reporting Income to Public Housing Agencies

While receiving assistance, it is the annual responsibility of the beneficiaries to provide their regional public housing agency with valid information on the following types of income, financial aid, and compensation: 

  • Private or public employment;
  • Disability;
  • Child Support;
  • Welfare;
  • Social Security;
  • Records of personal assets, including (but not limited to) property and investments;
  • Any other forms of income or financial assistance.

The HUD does not count these as income, but providing documentation may be required:

  • Foster care payments;
  • Medical reimbursements;
  • Employment income from family members under the age of 18;
  • Other forms of supplemental financial aid—speak with your local housing agent to further determine which are and are not applicable to you.

Your housing agent will inform you of all procedures you are to abide by in terms of reporting your income. If you do not submit to these terms or withhold necessary documentation, you run the risk of committing Section 8 fraud.

Section 8 Income Fraud

Individuals who have committed Section 8 fraud have failed to supply accurate or sufficient documentation of their household income to their public housing agency or on their HUD application. Under-reporting income, bribery, and fabricating documents are just a few types of Section 8 fraud.

Whether or not the responsible party intentionally reports discrepant information, or simply overlooks important details by mistake, your housing agent or the HUD may still reserve the right to take legal action under the statutes of Section 8. 

Penalties for Not Reporting Income to Section 8

When a resident does not report or under-reports income, it will affect the amount of assistance they receive. Once this income discrepancy is discovered and verified, corrections to the resident’s previous certifications are required to ensure the correct amount of assistance is paid. They may repay in a lump sum, enter into a repayment agreement, or combine the two.

If the tenant is unable to repay the difference between the original assistance paid and the corrected amount that will include unreported income, the tenant should complete a Repayment Agreement. Repayment Agreements have specific requirements outlined in HUD Housing Notice 2013-06. (Visit our Resource Center for a copy of this Notice.)

Repayment Agreements

Properties are required to make the necessary corrections to all previous certifications affected by the unreported income amount. These corrections will generate adjustments on the voucher for the change(s) made. Properties are required to report all repayment agreements in Section 7 of the MAT30. MAT User’s Guide Chapter 4 and Chapter 6 outline detailed information and instructions posted along with the form on the HUD 5 forms page.

In addition to Housing Notice 2013-06, you will find more information about this topic in the HUD Handbook 4350.3, Chapter 8, Section 4 to help with identifying when an owner must investigate; how to distinguish between tenant error and fraud; and how to take action when discovering a discrepancy.

The property must enter the agreement information into their software and have an agreement ID unique to each instance of misreporting; This ID is a requirement for the reversal and each payment made. Additional instances of misreporting would require a new agreement ID.

The reversal—a positive amount to offset the negative adjustments generated by the corrected certifications—is reported in Repayment Agreements (Section 7) of the MAT30. The reversal amount must not be greater than the adjustments generated by the corrected certifications.

You will find an Excel spreadsheet in the TRACS Industry Specification zip file that will assist you in determining the repayment amount owed. The spreadsheet also includes examples to help you properly report it on a voucher.

As the property receives payments from the tenant, the property will report the payment in Section 7 using the agreement ID. Owners/Agents may retain a portion of the money collected to cover incurred expenses as a result of the unreported income/program violation. The retained funds must be less than the actual cost or 20% of the amount collected from the tenant, as detailed in Chapter 8, 8-21, B-2 of HUD Handbook 4350.3.