Understanding Section 8 housing assistance starts with knowing the terminology. This glossary covers the key terms used in HUD's Fair Market Rent program, Housing Choice Vouchers, and related housing assistance programs.
Core Concepts
Fair Market Rent (FMR) — Fair Market Rent is the amount HUD determines is needed to rent a moderately-priced unit in a given area. FMR sets the baseline for Section 8 Housing Choice Voucher payments.
Section 8 Housing — Section 8 is a federal housing assistance program that provides rental subsidies to low-income families, the elderly, and people with disabilities through Housing Choice Vouchers.
Housing Choice Voucher — A Housing Choice Voucher is a federal subsidy that allows low-income families to choose and rent privately-owned housing. The voucher covers the gap between tenant contribution and approved rent.
U.S. Department of Housing and Urban Development (HUD) — HUD is the federal agency responsible for housing policy, including setting Fair Market Rents, administering Section 8, and overseeing public housing programs nationwide.
Small Area Fair Market Rent (SAFMR) — Small Area FMR sets rent limits at the ZIP code level instead of the metro area level, giving voucher holders better access to higher-opportunity neighborhoods.
Financial Terms
Payment Standard — The payment standard is the maximum subsidy amount a Public Housing Authority will pay for a given unit size. It is based on FMR and determines the voucher's purchasing power.
Utility Allowance — A utility allowance is the estimated monthly cost of essential utilities for a rental unit. It is subtracted from the tenant's rent portion in the Section 8 subsidy calculation.
Housing Assistance Payment (HAP) — The Housing Assistance Payment is the monthly subsidy the PHA pays directly to the landlord on behalf of a Section 8 voucher holder.
Section 8 Income Limits — Income limits define the maximum household income for Section 8 eligibility. HUD publishes limits annually for each area based on Area Median Income (AMI).
Total Tenant Payment (TTP) — The Total Tenant Payment is the amount a Section 8 household must contribute toward rent and utilities each month, generally calculated as 30% of adjusted monthly income.
Area Median Income (AMI) — Area Median Income is the midpoint household income for a specific geographic area. HUD uses AMI to determine eligibility for Section 8 and other housing programs.
Annual Adjustment Factor (AAF) — The Annual Adjustment Factor is the percentage used by HUD to update FMR and contract rents each year, reflecting changes in local rental market conditions.
Program Details
Public Housing Authority (PHA) — A Public Housing Authority is a local government agency that administers the Section 8 voucher program, manages waiting lists, conducts inspections, and sets payment standards.
Tenant-Based Rental Assistance — Tenant-based rental assistance is housing aid that follows the tenant, not the property. The Section 8 voucher is the primary example — families keep their assistance when they move.
Project-Based Voucher (PBV) — A project-based voucher is Section 8 assistance attached to a specific property rather than a tenant. Families in PBV units receive assistance only while living at that property.
Landlord Participation in Section 8 — Landlord participation in Section 8 means renting to Housing Choice Voucher holders. Landlords receive guaranteed monthly payments from the PHA and must meet program requirements.
Process & Compliance
Rent Reasonableness — Rent reasonableness is the requirement that Section 8 rents must be comparable to unsubsidized rents for similar units in the same area, preventing inflated pricing.
Voucher Portability — Portability allows Section 8 voucher holders to use their housing assistance in a different PHA jurisdiction than the one that issued the voucher.
Housing Quality Standards (HQS) — Housing Quality Standards are the minimum health and safety requirements that a rental unit must meet before a PHA will approve it for Section 8 occupancy.
Section 8 Waiting List — The Section 8 waiting list is a queue of eligible applicants waiting to receive a Housing Choice Voucher. Wait times can range from months to several years depending on location.