What Is Income Targeting
Income targeting is a federal requirement that Public Housing Authorities (PHAs) must allocate at least 75% of all newly issued Housing Choice Vouchers to extremely low-income families. These families earn no more than 30% of the area median income (AMI). This mandate, established under Section 8 regulations, shapes how vouchers are distributed when a PHA receives new funding or reissues vouchers from its existing program.
The 75 Percent Requirement
The 75% threshold applies specifically to newly issued vouchers, not to the entire active caseload. For example, if a PHA receives 100 new vouchers in a given year, at least 75 must go to households at or below 30% AMI. The remaining 25% can go to families at higher income levels, up to 80% AMI. This creates a practical priority system that landlords and applicants encounter directly when waiting lists open or vouchers become available.
Income Limits and Calculations
- 30% of AMI baseline: The extremely low-income threshold used for income targeting calculations. For a family of four in a high-cost urban area, this might be $28,000 to $32,000 annually, depending on the metropolitan area's median income.
- 80% AMI ceiling: The maximum income limit for the 25% of vouchers that do not fall under the 75% requirement. This provides some flexibility for PHAs serving mixed-income applicants.
- Annual recertification: Tenants must report income changes yearly. A household that exceeded the 30% threshold during turnover would be counted differently if it now qualifies under 30% AMI again.
Practical Implications for Landlords and Tenants
For landlords, income targeting affects tenant composition and program stability. PHAs prioritize extremely low-income households, which typically require more supportive services and may have greater barriers to employment. Payment standards and reasonable accommodations under Fair Market Rent (FMR) ensure landlords receive fair compensation regardless of tenant income tier.
For tenants, this requirement improves access for the most vulnerable applicants. If you earn under 30% AMI, you have priority when new vouchers are issued. Your PHA's waiting list policies reflect this, often using points-based systems or direct selections favoring eligible extremely low-income families.
Compliance and Monitoring
HUD monitors income targeting through annual PHA reports. PHAs that fail to meet the 75% target face compliance action and potential funding reductions. NSPIRE inspections do not directly assess income targeting, but PHA compliance across all program rules, including income targeting, affects overall program ratings and funding. Landlords should verify that a PHA maintains current compliance when considering program participation.
Common Questions
- Does income targeting affect my rent or voucher amount? No. Your rent is determined by the unit's FMR and your household contribution (typically 30% of adjusted income), regardless of whether you were allocated under the 75% requirement or the 25% alternative.
- What happens if my income increases above 30% AMI after I receive a voucher? You can keep your voucher. Income targeting applies only at issuance. If you exceed income limits during annual recertification, your PHA may terminate your voucher or adjust your rent share under program rules.
- How does income targeting affect waiting list timelines? It creates a two-tier system. Roughly 75% of new vouchers go faster to extremely low-income applicants. The remaining 25% may go to higher-income applicants with longer waits. Your PHA's policies should clearly explain their allocation method.