Section 8 is a program administrated by the U.S. Department of Housing and Urban Development or HUD. The program helps those with extremely low to low-income find housing. One of the criteria that must be met to qualify for this program is your household’s income level.
Each year, HUD sets income limits that are broken down into three categories. The actual numbers for each level are different based on the area, so they are calculated as a percentage of the area’s median (or middle) income level.
- To be in the extremely low-income level, a family cannot earn more than 30 percent of the area’s median income level.
- For the very low-income level, a family cannot earn more than 50 percent of the area’s median income level.
- A low-income level family cannot earn more than 80 percent of the area’s median income level.
The level at which the family is placed also depends on the size of the family. What might be extremely-low-income for a family of one will be different for a family of seven or eight people.
How Family Income is Calculated
There are several factors used to calculate a family’s yearly income. The following is a list of what is included.
- Salary
- Overtime pay
- Commission
- Tips
- Interest or Dividends from Assets
- Pension
- Retirement Fund
- Child Support
- Alimony
- Unemployment
- Social Security
- Welfare
- Disability
- Worker’s Compensation
- Lottery Winnings
Employment Verification
When applying for Section 8, the applicant must have their Human Resources (HR) representative fill out a form, verifying their employment and how much they make. The HR representative must be the one who submits the form to the HUD. The applicant cannot submit the form.
Any time there are changes to the applicant’s income, it must be reported. If the applicant quits his or her job, gets a new job, or receives a raise through a current job, a new employment verification form must be filled out and submitted to the HUD.
Self-Employment Verification
If the applicant is self-employed, the rules are slightly different. The following are general guidelines, but it would be a good idea to check state specific requirements when applying. The first thing that must be done is to verify what type of self-employment the applicant qualifies as. For the most part, a person is self-employed if they are:
- Owners of the business
- Sub-Contractors who are paid by an employer with a 1099
- Sometimes the person is not sure. Processing third-party verification and additional clarification will help figure this out.
Applicants are considered household employees if they provide services in a private residence as a housekeeper, maid, babysitter, gardener, etc. When the work they perform and how they perform it is controlled by the individual who hired them, they are considered employees. The applicants would be only considered self-employed if the services they provide are their own business. In addition to a self-employment form, the applicant would need to provide additional documentation from the individual hiring him or her, showing how much is paid for the service and how often it is paid.
Self-employed applicants must submit two years of tax returns if their business has been in operation for many years. If the company is new then the applicant must complete an affidavit certifying the anticipated income for the next 12 months. They also must submit the previous year’s tax return, gross receipts, accountant statement of quarterly earnings, taxes paid it available, and any expenses paid.
Work requirements for Section 8 are fairly basic, but it is important to make sure all the rules are followed correctly.
