HUD FAQs

Back to Blog Main Page

Frequently Asked Questions (FAQs)
Income Eligibility and Rent in The HUD Rental Assistance Programs 

Who is eligible? 

Eligibility for rent assistance programs is based on family income, their citizenship or immigration status, and other characteristics.  Families are generally eligible for HUD assistance if their incomes are below certain income standards set by HUD. Income eligibility for HUD-assisted housing varies by locality and is tied to local area median income.  Each year, HUD reports area median incomes for metropolitan statistical areas and nonmetropolitan counties.  HUD then establishes three income limits based on a percentage of these area median incomes.  Whether a family qualifies for assistance varies by program. The three income limits are

  • Low-Income—families who have incomes at or below 80% of area median income
  • Very Low-Income—families who have incomes at or below 50% of area median income or
  • Extremely Low-Income—families who have incomes at or below the greater of 30% of area median income or the federal poverty level.

Income Targeting

In addition to setting basic income eligibility standards, the authorizing statutes for several housing assistance programs require that some share of the assistance be set aside for, or targeted to, families with the lowest incomes.

Families wishing to receive assistance are generally placed onto a waiting list.

How Is tenant rent determined?

Families receiving HUD rental assistance are generally required to contribute toward their rent. The subsidy the family receives then generally makes up the difference between the tenant contribution toward rent and the actual cost of the housing (rent and utilities). Families’ contributions are statutorily set as the greatest of

  • 30% of a family’s adjusted income,
  • 10% of a family’s gross income,
  • welfare rent (if applicable), or
  • Minimum rent $25

Once a family is determined eligible for HUD assistance and is selected to receive assistance, the rent they pay is generally based on 30% of their adjusted income. Those adjustments include deductions for elderly and disabled families, certain medical costs, and certain childcare costs. Families’ incomes, adjusted incomes, and contributions toward rent are typically recertified annually.

Are there age restrictions or housing for special populations?

For some of the HUD rental assistance programs, only special populations are eligible. The Section 202 program project based rental assistance program serves only elderly families 62 years of age or older.  For some of the HUD rental assistance programs units are designated for disabled families—those where the head of household (including cohead), spouse, or sole member has a disability as defined by statute

What is included in income?

HUD regulations provide an illustrative list of items included in income, which includes income earned on assets.  Among items included in income are:

  • earnings from employment, including overtime pay, tips, and bonuses
  • payments from Social Security, pensions, or other retirement benefits
  • disability income, including veteran’s disability benefits, death benefits, and insurance payments
  • unemployment compensation, disability compensation, and workers’ compensation Temporary Assistance for Needy Families (TANF) cash assistance (with exceptions)
  • alimony and child support; and
  • military pay

What are the rules for assets? 

There is no asset limit for eligibility under the Hud programs that we manage.  Instead, HUD either counts the actual income earned on assets, or impute income from assets, and include that amount in a household’s annual income calculation for purposes of determining eligibility and rent. Assets include real property, savings accounts, stocks, and bonds.  They do not include necessary personal items such as furniture and automobiles. 

Are utilities included in the rent?

In cases where utility costs (e.g., natural gas, electricity, other heat sources, water, sewer, and garbage) are not included in rent—meaning utilities are tenant-paid—tenants are provided with a utility allowance.  A utility allowance is meant to cover the approximate cost of tenant-paid utilities, based on a utility allowance schedule developed by the HUH and the property owner.  Utility allowances are deducted from a tenant’s monthly rental contribution, or, in the case where a utility allowance exceeds a tenant’s monthly rental contribution, a utility reimbursement is paid to the tenant.

What is adjusted income? 

Adjusted income is used to determine a family’s contribution toward rent in assisted housing. HUD and property owners calculate adjusted income after taking deductions from total annual income. By statute, there are a number of mandatory deductions from annual income when calculating adjusted income: 

  • Elderly and Disabled Families: $400 is deducted for elderly or disabled families.
  • Certain Unreimbursed Medical Expenses: To the extent that the sum of certain unreimbursed health-related expenses exceeds 3% of a family’s income, they may be deducted in the following cases: (1) medical expenses for elderly and disabled families, and (2) attendant care or apparatus expenses for a family member with a disability if the expenses allow any family member to work.
  • Reasonable Child Care Expenses: These are deductible to the extent that they allow a family member to be employed or further his or her education.
  • Dependents: $480 is deducted for each member of the family who is not the head of household and who is either (1) younger than 18; (2) a full-time student; or (3) 18 or older and has a disability.

How often is family income recertified? 

  • The statute governing tenant income eligibility states that family income must be reviewed upon selection for assistance and at least annually thereafter.  HUD regulations require annual recertification of tenant income and rent and give guidance regarding interim recertification.
  • Across all programs, families must report any changes in family composition when they occur, and family income must be reexamined at that time.
  • If a family experiences a decrease in income, the family may request a mid-year reexamination. If a family experiences an increase in income, HUD and owners are required to reexamine income, though the circumstances of how this occurs vary by program.  In the three project-based rental assistance programs, if the family experiences an increase in income, the owner must reexamine family income if it increases by $200 or more per month. 
f a q graphic