Learn About Section 8 Housing Income Limits

Understanding Section 8 Housing Income Limits

Section 8 is a federal housing program that helps people with low incomes pay rent for private housing. The program does not provide housing directly. Instead, it gives vouchers that reduce what tenants pay each month. The amount of rent assistance depends on income level.

Income limits determine whether someone may participate in the program. These limits vary by location and household size. The U.S. Department of Housing and Urban Development (HUD) sets guidelines, but local housing authorities make the actual rules for their areas. A family that earns too much may not participate, while a family below the limit might be considered.

The median family income (MFI) is the starting point for setting limits. HUD calculates MFI for each area based on census data and other sources. Income limits are typically set at a percentage of the MFI—often 50%, 60%, or 80% depending on the program type and local decisions. For example, if an area's MFI is $60,000, the 50% limit would be $30,000.

Income limits change each year. HUD publishes new limits annually, usually in March or April. Housing authorities update their programs with the new numbers. Someone who did not meet the limit one year might meet it the next year if limits increase, though this is not guaranteed. Conversely, if limits decrease, fewer households might participate.

Practical takeaway: Section 8 income limits work like a threshold. Your household's total income is compared to the limit for your area and family size. To learn what the current limits are in a specific location, contact the local public housing authority or visit HUD's website for published income limit tables.

How Income Is Calculated for Section 8

Income calculation for Section 8 purposes is specific and follows HUD rules. Not all money a household receives counts as income. Understanding what does and does not count matters when comparing a family's earnings to the program limit.

Earned income includes wages, salaries, tips, and self-employment earnings. This is the most straightforward category. A person who works full-time or part-time, or who runs a small business, reports this income. Overtime pay and bonuses count. If someone recently became unemployed, that previous income may not count going forward, depending on the circumstances and local rules.

Unearned income includes Social Security benefits, pensions, unemployment benefits, child support, and alimony. These forms of income count toward the limit even though no work produces them. Temporary assistance payments, worker's compensation, and disability payments also count. Interest from savings accounts and dividends from investments count as unearned income.

Certain items do not count. For example, food stamps (SNAP benefits) do not count as income. Tax refunds do not count. Lump-sum payments like inheritance or insurance settlements typically do not count as ongoing income. Foster care payments do not count. Student financial aid may or may not count depending on how it is used. Scholarships used for education may be excluded.

HUD allows some deductions from income. For example, if a household member is disabled or elderly, a deduction may apply. Childcare expenses to allow parents to work may reduce countable income. Medical expenses for elderly or disabled members may be deducted. These deductions lower the final income number compared to the limit.

Practical takeaway: When checking income against Section 8 limits, add up wages from all employed household members, plus any Social Security, pensions, or other regular payments. Subtract any allowed deductions. Contact your local housing authority to confirm which specific items count in your area, as some rules allow local variation.

Income Limit Tables by Family Size

Section 8 income limits change based on how many people live in the household. A family of four has a higher limit than a family of two. HUD publishes tables showing limits for households of various sizes in each area.

A family is defined as any group of people living together, whether related or not. Children, adults, elderly members, and disabled members all count toward household size. Unborn children do not count. Live-in caregivers who receive payment may or may not count depending on circumstances.

Here are examples of 2024 income limits from three different areas (these are 30% AMI limits, one common threshold):

• Rural county in Mississippi: Family of 1 = $15,600 per year; Family of 4 = $19,800; Family of 8 = $24,750
• Mid-size city in Ohio: Family of 1 = $21,450 per year; Family of 4 = $27,300; Family of 8 = $34,200
• Urban area in California: Family of 1 = $31,200 per year; Family of 4 = $39,600; Family of 8 = $49,500

Notice the large difference between regions. Housing costs and local economies drive these variations. A salary of $30,000 per year might exceed the limit in Mississippi but fall well below it in California. The same family income has different significance depending on geography.

Most housing authorities publish their income limits on their websites or provide printed copies. The limits show breakdowns for family sizes from 1 to 8 people. If a household has more than 8 members, the authority provides guidance on adding extra amounts per person. Limits are usually given as yearly amounts, though some also show monthly figures.

Practical takeaway: Find your local housing authority's income limit table. Locate your household size row and read the limit column. If your household's total annual income is at or below that number, you may meet this part of the requirement. If your household has more than 8 people, ask the authority how to calculate your specific limit.

Very Low-Income and Extremely Low-Income Thresholds

Section 8 uses two main income categories. Understanding the difference helps explain why limits vary.

Very Low-Income (VLI) is typically set at 50% of the area median income. This is the standard threshold for most Section 8 programs. If HUD uses 50% AMI as the limit, a family earning up to that amount may participate in Section 8. For example, if an area's median income is $60,000, the VLI limit would be $30,000 for a family of four.

Extremely Low-Income (ELI) is typically set at 30% of the area median income. Some Section 8 programs have ELI-specific reservations. This means a percentage of vouchers must go to households earning no more than 30% AMI. A family at the ELI level has very limited income. If median income is $60,000, the ELI limit is $18,000 for a family of four. ELI families receive stronger rent subsidies because their resources are more constrained.

Some housing authorities also use the 60% AMI level for certain programs. This is higher than the standard VLI threshold and allows more moderate-income families to participate, though still below overall area income levels. The specific thresholds vary by program type and local authority decisions.

The reason for these categories is to ensure assistance reaches the poorest households. Federal regulations require that a minimum percentage of Section 8 vouchers go to ELI families. Without this requirement, all vouchers might go to families closer to the 50% limit, leaving the neediest families without help.

Practical takeaway: If you are reading that a program serves "50% AMI," that refers to VLI. If it says "30% AMI," that refers to ELI. These numbers represent what percentage of your area's average income is the maximum allowed. Higher percentages allow somewhat higher-earning families to participate.

Geographic Variation and Area Median Income

Section 8 income limits are not the same everywhere. Geography—the specific location—determines the limit. Two families with identical incomes in different cities may have different Section 8 eligibility because their local limits differ.

Area Median Income (AMI) is the key factor. The U.S. Census Bureau calculates median household income for areas. HUD uses these figures to set income limits. An area with high median income gets higher Section 8 limits.