HAMC Logo Various housing and rental units
 

 

Supplemental Information about rent calculations and Payment Standards.

The purpose of this page is to provide basic information about how rents are calulated, how the value of the voucher is determined and how much a family will pay.

 

1. Do I have to pay part of the rent? How much do I have to pay?

It depends on your voucher, your lease and you. The payment amount depends on the bedroom size designated on the voucher and your income. If you have questions about this, call your case manager.

2. What are payment standards?

Payment Standards are used to calculate the maximum amount of the housing subsidy that HAMC will pay on behalf of a family. Rents on the Voucher Program may NOT exceed the Payment Standard (rent plus utility expense).

Payment Standards are based on the Fair Market Rents (FMRs), and must be within 90% - 110% of the FMRs. Fair Market Rent (FMR) is the combination of rent and tenant-paid utilities used for participants in the Housing Choice Voucher (Section 8) Program. FMRs are adjusted annually by HUD to reflect the area's current market rents.

3. How much are HAMC's payment standards?

Effective March 1, 2011, HAMC Payment Standards for subsidized units will be adjusted as follows: 0 bedrooms = $666, 1 bedroom = $776, 2 bedrooms = $900, 3 bedrooms = $1277, 4 bedrooms = $1495 and 5 bedrooms = $1655.

4. What are utility allowances?

HUD has defined "rent" to include both shelter and the costs for reasonable amounts of utilities. The amount determined necessary to cover the resident's reasonable utility costs is the utility allowance.

At the time a the lease is approved, a determination of utilities and/or services paid by the tenant is made. The utility allowance tables are calculated according to HUD approved methodology based on theoretical average consumption, not actual tenant usage. The allowance varies greatly by unit size (number of bedrooms), type of unit (house, row / duplex / town house, mobile home), who pays the utility (landlord or renter) and/or what utilities (WST-water, sewage and trash, electricity, natural gas), type of heating (gas or electric), electricity service provider (SRP/APS) and the community one lives in (costs vary by city and area). The total of the utility obligations of the tenant equals the Utility Allowance. If the Utility Allowance is greater than the tenant's total tenant payment, a Utility Reimbursement Payment is sent to the tenant.

TV, Internet and telephone services are not included in the Utility Allowance.

5. How much are the utility allowances?

Effective March 1, 2011, assuming that all utilities are paid by the tenant, the utility allowance will usually would fall within these values: 0 bedrooms = $130 - $153, 1 bedroom = $154 - $169, 2 bedrooms = $191 - $213, 3 bedrooms = $227 - $272, 4 bedrooms = $263 - $329, and 5 bedrooms = $299 - $380. Remember, every lease is different and the Utlity Allowance cannot be calculated until the rental contract is reviewed and approved.

A detailed schedule of HAMC utility allowances by unit type and size may be found in the Forms Library page here.

6. How is the rent subsidy calculated? Can you provide an example?

This is a simplified explanation of how the voucher subsidy is calculated. It is presented only to provide an example of the rules that determine the amount of the voucher and the portion the renter may have to contribute. Every case is different. It is HUD policy that no more than 30% of a person's net income be used for rent.

Consider the case of John and Maria Sample. They have one child and no major medical expenses. Only John works, sometimes. Here is what they would pay for a 2-bedroom apartment renting for $690 under difference income scenarios ($0, $500, $1000, $1500 and $2000/month). Note that the HAMC payment standard for a 2-bed unit is $900 and the applicable Utility Allowance is $192 if tenant pays all utilities.

In simple terms, the more the family makes (Scenarios A-E), the more it pays towards rent (line 8) and, at the same time, the voucher HAP payment made to the landlord by HAMC becomes smaller (line 7). Note that for very low income families, HAMC may provide a check (URP) to help with utilities (line9).

Scenario F shows the effect of renting a unit for an amount that exceeds the Payment Standard when utilities are considered. A voucher holder earning $1000/month has rented a bigger apartment for $800 instead of $690. In this case the tenant in this case will pay $422 a month, instead of $312 (in pink). The tenent should ask his/her caseworker to explain how much they can pay for a unit with their voucher. Remember, every case is different and these examples are simplified calculations and do not show all variables that must be considered.

Scenario:
A
B
C
D
E
F
1. Monthly Gross Income (I)
$0
$500
$1000
$1500
$2000
$1000
2. Rent for 2-bed apartment (R)
690
690
690
690
690
800
3. 30% Adjusted Income (TR)
50
162
312
462
612
312
4. Utility Allowance (UA)
192
192
192
192
192
192
5. Gross Rent Allowed (R+UA)
882
882
882
882
882
882
6. Payment Standard (2 beds)
900
900
900
900
900
900
 
7. HAMC voucher paymt (HAP)
640
528
378
228
78
378
8. Tenant Payment (TTP)
50
162
312
462
612
422
9. Utility Reemburs. Payt (URP)
142
30
0
0
0
0

Notes:

The tenant rent (3) is 30% of the gross annual income (monthly x 12) minus deductions, in this case $480 for the child, then divided by 12 again. HAMC requires a minumum $50 rent participation that may be waived under certain hardship cases.

The utility allowance (4) varies greatly and each unit is different (see Question 4 above). In this case we are considering all utilitues to be paid by tenant for an aprtment-type unit. Consult your caseworker if you have want more information about this.

The gross rent allowed is the reasonable rent (R) plus the utilty allowance (UA). This should be less than the Payment Standard (PS) to avoid additional rent payment by tenant. Note that HAMC does not allow tenants to rent unit for amounts that exceed 40% of adjusted income. If the tenant decides to choose a more expensive unit, most of the additional cost will be paid by the tenant (see Scenario F and amounts in pink above).

Once a contract is approved and signed, and the unit inspected, HAMC will pay its share of rent directly to the landlord (line 7). This is called the HAP - Housing Assistance Payment. The tenant(s) will usually also pay a part of the rent based upon his/her/their income (line 8). If the tenant's part of the rent is less than the Utility Allowance (and the utilities are to be paid by the renter), the tenant will receive a Utility Reimburement Payment (URP) for the difference (line 9).

The Section 8 voucher assistance payments are subject to HUD regulations and US Government rules. Any unreported income, fraud or illegal activity by either landlord or renter may result in criminal charges. Because the Voucher program is income-based, any changes to income or family composition may change the rental payment calculations. These changes should be reported immediately to HAMC, not when the contract expires or is renewed.

Click here to return the the main Section 8 page.


Top-of-page button