Order Code RL33270
CRS Report for Congress
Received through the CRS Web
The Section 8 Housing Voucher Program:
Reform Proposals
February 13, 2006
Maggie McCarty
Analyst in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

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The Section 8 Housing Voucher Program:
Reform Proposals
Summary
The Bush Administration has proposed eliminating the Section 8 Housing
Choice Voucher program and replacing it with a new program in each of the past
several years. While the specifics have changed, each proposal would significantly
alter key features of the current program, including its administration, funding
distribution, tenant contributions toward rent, initial and ongoing eligibility of
families, and the eligible uses of program funds.
The first proposal was referenced in the President’s FY2004 budget request and
was later introduced in the 108th Congress (H.R. 1841/S. 947). Called the Housing
Assistance for Needy Families Act of 2003, it would have created a new block grant
administered by states — rather than the local public housing authorities (PHAs) that
administer the current program — and eliminated many of the current rules
governing the program. Hearings were held on the legislation, although no further
action was taken.
Language to enact the second proposal, called the Flexible Voucher Program
(FVP), was included in the Administrative Provisions section of the President’s
FY2005 budget request. Under the FVP, PHAs would have retained administration
of the new grant program, although most of the federal Section 8 voucher rules and
regulations would have been eliminated. The Appropriations Committees did not
include the language in their versions, nor the final version, of the FY2005 HUD
budget. Authorizing legislation was not introduced in the second session of the 108th
Congress.
The President’s FY2006 budget request again called for enactment of a Flexible
Voucher Program. During the first session of the 109th Congress, a modified version
of the FVP was included as Title I of the State and Local Housing Flexibility Act of
2005 (H.R. 1999/S. 771). The House Financial Services Committee held hearings
on the bill, although no further action has been taken. The President’s FY2007
budget request reiterates the Administration’s support for the State and Local
Housing Flexibility Act.
This report includes a table comparing the key features of the recent proposals,
and will be updated to track relevant legislative activity.

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Contents
Current Program Features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Eligible Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Tenant Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Initial and Ongoing Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Funding Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Reform Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Housing Assistance for Needy Families (HANF) . . . . . . . . . . . . . . . . . . . . . 5
The FY2005 Flexible Voucher Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The State and Local Housing Flexibility Act of 2005 (S. 771/H.R. 1999) . . 6
List of Tables
Table 1. Key Features of Recent Reform Proposals Compared to Current Law . 8

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The Section 8 Housing Voucher Program:
Reform Proposals
Current Program Features
The Section 8 Housing Choice Voucher program has come under increasing
criticism from the Administration and Congress for its cost and its complexity.
Recent changes in the way the program is funded have largely addressed concerns at
the federal level about “spiraling costs”; however, the new funding structure has not
reduced budget pressures for the local public housing authorities (PHAs) that
administer the program.1 Noting these concerns, the Administration has argued in
each of the past several years that the existing Section 8 voucher program should be
dismantled and replaced with a new, broader-purpose grant program. While the
Administration’s reform proposals have changed every year, each has proposed to
alter several key characteristics of the current program, which are discussed below.
Administration. The current Section 8 Housing Choice Voucher program,
and its approximately 2 million vouchers, are administered by more than 2,500 local
PHAs across the country. PHAs vary greatly both in their size and their capacity.
Some administer as few as 10 vouchers, while one PHA, the New York City Housing
Authority, administers almost 90,000. Half of all PHAs administer 250 or fewer
vouchers.2 Some PHAs have a full-time director and a large staff; others have one
person serving part-time as director and staff.
This heterogeneity has been criticized by some researchers, housing advocates,
and the Administration. They argue that housing markets are regional, and thus that
housing programs should be administered on a regional level. They point out that
most other social service programs serving the low-income population — such as
Temporary Assistance for Needy Families, Child Care Assistance, and Food Stamps
— are administered at the state level. If the voucher program were administered at
the state level, they contend, it might be easier to coordinate it with other services.
The organizations representing PHAs have disagreed, arguing in favor of the
current locally driven and focused system. PHAs have important local connections
1 For more information, see CRS Report RS22376, Changes to Section 8 Housing Voucher
Renewal Funding, FY2003-FY2006, by Maggie McCarty.
2 Written Testimony, Michael Liu, Assistant Secretary for Public and Indian Housing,
Department of Housing and Urban Development, hearing before the Housing and
Community Opportunity Subcommittee of the House Financial Services Committee, May
22, 2003.

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CRS-2
with entities ranging from landlords to local zoning boards, connections that states,
they contend, would not have.3
Eligible Uses of Funds. Today’s voucher program provides a defined
subsidy, called a voucher, that a family can use to help pay its housing costs in the
private market. That voucher pays roughly the difference between rent and a portion
of income. In some cases, families can use their vouchers to help pay for a mortgage,
but only if their PHA chooses to run a homeownership voucher program. PHAs
receive some additional funds through the family self sufficiency (FSS) program and
administrative fees, which they can use for other purposes, such as providing
supportive services, downpayment or security deposit assistance, or housing search
assistance. This system is governed by hundreds of pages of regulations and
guidance that make the program, some argue, overly prescriptive and difficult to
administer. The Administration and PHAs agree that the current structure limits the
ability to undertake innovative initiatives.
Reflecting this concern, the Administration has proposed redefining the concept
of a voucher by instead providing funds that could be used for rental assistance,
homeownership assistance, and supportive services, as defined by the grantee. A
“voucher” would no longer have uniform meaning, and PHAs could provide more
or less generous assistance to families at their discretion, outside of most current
federal rules (i.e., quality standards, portability, income targeting, income-based rent,
etc.). Such a reform would be consistent with the 1996 welfare reform law that
abolished the Aid to Families with Dependent Children (AFDC) program and
replaced it with a broader-purpose Temporary Assistance for Needy Families (TANF)
block grant.
Critics of this type of administrative flexibility at the PHA level contend that
many of the current rules governing the voucher program are designed to protect
voucher recipients. They worry that the needs of low-income families could go
unmet if federal rules are abandoned. Some further contend that without strong
oversight, broad block grants could be open to waste, fraud and abuse.
Tenant Rents. Under the current rules of the voucher program, families are
required to pay the greater of 30% of their adjusted incomes or a PHA-adopted flat
rent (no greater than $50). It is generally accepted that housing is affordable for low-
income families if it costs no more than 30% of their adjusted gross income, on the
assumption that low-income families need the full remaining 70% to meet their other
needs. However, this figure is somewhat arbitrary. For some families with little
work, transportation, medical, child care, or other outside costs, 40% or even 50%
of income might be a reasonable contribution toward housing costs. In fact, the
current voucher program allows families to choose to pay up to 40% of their incomes
toward housing costs initially, and even greater amounts upon renewal of a lease. For
other families, with high expenses for work, transportation, medical, child care, or
other outside costs, some percentage lower than 30% might be the most reasonable
contribution.
3 National Association of Housing and Redevelopment Officials (NAHRO), NAHRO Direct
News: Section 8, May 29, 2003, attachment C.

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CRS-3
Critics of the current rent calculation, including the Administration and some
PHA groups, generally argue for one of two changes: increase the amount of income
a family can pay toward rent, or decouple rent from income by adopting flat or tiered
rents. Flat rents could work in a couple of different ways. Families could pay a
PHA-determined, fixed below-market rent, based on unit size, regardless of their
incomes. As incomes change, rent would stay the same. A PHA could also choose
to adopt tiered rents. Under tiered rents, PHAs set different flat rents for broad tiers
of income. Families pay the rent charged for their income tier, and only fluctuations
in income that move them from one tier to another would change their rent. Unless
flat rents were set low, either change would result in shallower subsidies paid to
families. Shallower subsidies would allow PHAs either to save money or serve more
people with the same amount of money.
Another argument in favor of moving from an income-based rent to a flat rent
concerns administrative ease. The current complicated rent calculation, paired with
the difficulty of verifying the incomes of tenants, has led to high levels of error in the
subsidy calculation. According to a HUD 2001 Quality Control study, 60% of all
rent and subsidy calculations contained some type of error. HUD has estimated an
annual $2 billion in subsidy over- and under-payments in the Section 8 voucher
program. These errors have led the Government Accountability Office (GAO) to
designate the Section 8 program a “high risk” program, meaning that it is particularly
susceptible to waste, fraud, and abuse. Beginning with the FY2003 Consolidated
Appropriations Act (P.L. 108-7), HUD was given access to the National Directory
of New Hires, a database that may allow PHAs to better verify income data. This
new option may help PHAs increase their accuracy.
Another argument in favor of a flat rent structure involves the work
disincentives inherent in the current calculation. Since rent goes up as income goes
up, families have a disincentive to increase earnings and/or an incentive to hide
income. Families with Section 8 subsidies face an effective 30% tax on any increase
in earnings. To get around this problem in the Public Housing program, Congress
has instituted a mandatory income disregard; however, no such mandatory disregard
exists in the voucher program.4 Currently, in the voucher program, if PHAs choose
to disregard increased earnings, they must pay the difference out of their own budgets
or face sanctions from HUD for not accurately calculating subsidies.
Low-income housing advocates generally support income-based rents over flat
rents. Flat rents are not as responsive to changes in family income as income-based
rents, and their adoption can result in families paying much less or much more
toward rent than is generally considered affordable (30% of income).
Initial and Ongoing Eligibility. The current voucher program sets general
eligibility for assistance at the very low-income level [50% or below of area median
income (AMI)], with the requirement that 75% of all vouchers be targeted to
4 There is a mandatory earned income disregard applicable only to disabled families in
certain situations. For more information, see The National Housing Law Project’s Earned
Income Disregard Packet for Public Housing Voucher Program and Other HUD Programs,
available at [http://www.nhlp.org/html/pubhsg/eid_packet.htm].

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CRS-4
extremely low-income families (30%, or below AMI).5 The Administration has
advocated raising eligibility levels and loosening targeting requirements, which could
result either in cost savings or the ability to serve more families with the same
amount of money. Low-income housing advocates support retaining current income
eligibility and targeting requirements. They argue that the lowest-income households
face the heaviest rent burdens and are the most need in of assistance.
Another option would give incentives to families to increase their work efforts
and therefore their incomes. Non-elderly, non-disabled families could be encouraged
to find and increase work through expansions in the Family Self-Sufficiency program
or by the institution of time limits and/or work requirements. Low-income housing
advocates generally support expanding the FSS program, which encourages work and
increases in earnings. However, expanding FSS would not result in cost savings,
since as families’ incomes rise, their rent increases are deposited in an escrow
account.
The current voucher program does not have a work requirement. Families that
receive voucher assistance can retain that assistance until either they choose to leave
the program; they are forced to leave the program (due to non-compliance with
program rules or insufficient funding); or their income rises to the point that 30%
equals the rent, at which point their subsidy is zero. The Public Housing program
does have a mandatory eight-hour work or community service requirement for non-
elderly, non-disabled tenants; however, most public housing residents are exempted,
and it is unclear how thoroughly the provision has been implemented.6 Adopting a
strict work requirement in the voucher program may help encourage non-elderly,
non-disabled households that are not currently working to go to work, although it
may not increase their incomes. Even with a strict work requirement, research based
on the 1996 welfare reform changes (P.L. 104-193) indicates that for many poor
families, increases in work do not necessarily translate into greater total income, and
most households need work supports (such as child care and transportation
assistance) in order to make them successful in becoming financially self-sufficient.7
Such supportive services are not currently part of the voucher program, and would
require additional funding.
Funding Allocation. Prior to FY2003, HUD reimbursed PHAs for the actual
cost of their vouchers. The cost of a voucher is equal to roughly the difference
between the rent (capped by a maximum set by the PHA and called the payment
standard) and the tenant’s contribution toward the rent (30% of the tenant’s income).
PHAs’ costs would fluctuate as tenants’ incomes and market rents increased or
decreased. Each year, HUD would ask Congress for funding sufficient to cover what
HUD anticipated it would take to fund PHAs’ costs.
5 For example, 50% of AMI in Missoula, MT was $24,050, and 30% was $14,450 in 2005.
Fifty percent of AMI in San Francisco, CA was $50,900, and 30% was $30,550 in 2005.
6 For more information on the community service/work requirement in public housing, see
CRS Report RS21591, Community Service Requirement for Residents of Public Housing,
by Maggie McCarty.
7 See CRS Report RL30797, Trends in Welfare, Work and the Economic Well-Being of
Female-Headed Families with Children: 1987-2002, by Thomas Gabe.

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CRS-5
Due partly to changes in the rental market and partly to changes in the rules of
the voucher program (such as increases in the payment standard), PHAs’ actual costs
began rising rapidly in 2002 and 2003. Congress and the Administration expressed
concern about “spiraling cost growth.” The Administration proposed changes in both
the way that PHAs received funds as well as the underlying factors that led to the cost
growth, including the amount tenants were asked to contribute towards rent and the
maximum payment standard. Congress reacted by changing only the way that PHAs
receive their funding. Rather than being reimbursed for their actual costs, PHAs in
recent years have received a budget based on what they received in the previous
year.8
This has led to problems for many PHAs, whose actual costs are still driven by
the difference between rents and incomes in their communities while their funding
is capped. As a result, some PHA groups have called for either a change back to an
actual cost funding formula or a change in the structure of the voucher program that
would allow them to better control their costs.
Reform Proposals
In each of the past three years, the President has proposed to eliminate the
Section 8 voucher program and replace it with a new initiative. Authorizing
legislation has been introduced in Congress in two of those three years, although no
further action has been taken. The three proposals are discussed briefly below; a
comparison of proposed major changes to current law can be found in Table 1.
Housing Assistance for Needy Families (HANF)
The HANF program (H.R. 1841 and S. 947, 108th Congress) was a Bush
Administration initiative that would have replaced the existing tenant-based voucher
program that is administered by local PHAs with a formula grant to states. Rather
than receiving funding for a fixed number of units, states would have received a fixed
budget, proportional to the amount of funds the state was receiving under the
Housing Choice Voucher program. States would have had broad discretion in how
they used their funds, including for homeownership purposes. The Secretary of HUD
would have been permitted to lower the 75% targeting requirement to 55%, impose
minimum rents, increase eligibility to 80% of area median income, and reduce the
frequency of housing quality inspections from annually to every three years.
Low-income housing advocates opposed HANF out of concern that it could lead
to an erosion of funding and that it would not serve low-income families adequately.
PHA groups opposed the proposal to transfer administration to states and also voiced
concerns about erosion in funding levels. HANF was not acted upon in the 108th
Congress, although multiple hearings were held.
8 See CRS Report RS22376, Changes to Section 8 Housing Voucher Renewal Funding,
FY2003-FY2006, by Maggie McCarty.

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The FY2005 Flexible Voucher Program
The President’s Flexible Voucher Program (FVP), was first recommended in the
second session of the 108th Congress in the Administrative Provisions section of the
FY2005 HUD budget request. The HUD Secretary testified that the Department did
not plan to pursue authorizing legislation. Rather, officials stated during a hearing
before the VA, HUD and Independent Agencies Appropriations Subcommittee on
March 4, 2004, that they appreciated the leadership of the Appropriations
Committees and were asking them to include the provision in the FY2005
appropriations bill.
The proposal, like HANF, would have replaced the voucher program with a
broader-purpose grant program. Unlike HANF, PHAs would be asked to administer
the FVP. They would have received a fixed number of dollars that they could have
used to serve as many families as they chose, providing a broad range of assistance
ranging from cash grants to ongoing rental assistance. HUD would have eliminated
caps on on how much families could be required to contribute towards rent, increased
income eligibility to 80% or below of AMI, and eliminated any targeting
requirements.
The House Financial Services Committee, in their Views and Estimates of the
President’s FY2005 Budget, was critical of the President’s FVP proposal. The
Chairman of the Senate VA, HUD and Independent Agencies Appropriations
Subcommittee stated in a hearing on April 1, 2004, that the Flexible Voucher
proposal was “a poor substitute for flaws in the program” and that the Committee
would not have the “luxury of time to consider fully” the proposal.9 The FVP was
not enacted before the end of the 108th Congress.

The State and Local Housing Flexibility Act
of 2005 (S. 771/H.R. 1999)
The Administration’s State and Local Housing Flexibility Act of 2005 (SLHFA)
was introduced by Senator Allard on April 13, 2005 and by Representative Gary
Miller on April 28, 2005, as S. 771 and H.R. 1999, respectively. The bill consists of
three titles. Title I, The Flexible Voucher Act, is discussed further below. Title II,
Public Housing Rent Flexibility and Simplification, would permit PHAs to alter the
rent calculations for public housing in the same ways they would be permitted to
change voucher rents under Title I. Title III, the Moving To Work Program, would
make the current Moving to Work demonstration a permanent program with
expanded eligibility for PHAs, and expanded waiver authority for the Secretary of
HUD.
Title I is similar to the Flexible Voucher Program proposed by the
Administration as part of the FY2005 budget request. It would replace the current
voucher program with a broader-purpose grant program. PHAs would continue to
administer the program, although if they were not meeting the Secretary’s
9 Statement of Senator Kit Bond, VA- HUD Appropriations Subcommittee FY2005 Budget
Hearing, Apr. 1 2004.

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CRS-7
performance standards, their funds could be awarded to other entities selected by the
Secretary.
Flexible Voucher Program funds could be used for six eligible activities:
tenant-based rental assistance; project-based rental assistance; tenant-based
homeownership assistance for first-time homebuyers; self-sufficiency activities,
including escrow savings accounts; other activities, as specified by the Secretary, in
support of tenant-based, project-based, or homeownership assistance; and
administrative costs. Income eligibility, targeting, subsidy determination, and quality
inspection rules would all be loosened, while portability rules and enhanced voucher
features would be restricted. The Secretary would be directed to develop temporary
implementing regulations within 90 days of passage, and final regulations, not
including funding formulas, within 18 months. The Secretary would be directed to
undertake negotiated rulemaking to develop grant and administrative fee allocation
formulas, to be published within 24 months.
Hearings were held on the SLHFA in the House on May 11, 2005; hearings have
not been scheduled in the Senate. The President’s FY2007 budget request reiterates
its support for the bill.

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CRS-8
Table 1. Key Features of Recent Reform Proposals Compared to Current Law
FY2004 Housing Assistance
FY2006 Flexible Voucher
Housing Choice Voucher
For Needy Families
FY2005 Flexible Voucher
Program
Program Current Law
(H.R. 1841/S. 947)
Program
(S. 771/H.R. 1999)
Administering Body
Thirty-three states
currently
States would have the option to
PHAs would be permitted to
PHAs would be permitted to
administer a portion of the HCV
administer the whole program,
administer the program. If a
administer the program. If a
program, but most funds are
contract all or part to PHAs, or
PHA were not organized or the
PHA were not organized or the
administered by local public
not participate.
Secretary determined the PHA
Secretary determined the PHA
housing authorities (PHAs).
was unwilling or unable to
was not capable of effectively
administer the grant, the
administering the assistance, the
Secretary could choose an “other
Secretary could choose an “other
entity” that is authorized to
entity” to administer the grant.
engage in or assist in the
That other entity could be a
development and operation of
private or nonprofit organization.
low-income housing. That other
entity could be a private or
nonprofit organization.
Eligibility
Generally, families are eligible if
Initial eligibility for the program
Families would be eligible if their
Families would be eligible if their
their adjusted gross income is
would be set at the low-income
gross incomes were at or below
gross incomes were at or below
very low-income, defined as at or
level (at or below 80% of AMI),
80% of AMI. Income would be
80% of AMI. Income would be
below 50% of area median
although the Secretary could
reexamined every other year, and
reexamined every other year, and
income (AMI). Income must be
choose to expand eligibility
every three years for elderly or
every three years for elderly or
reexamined annually.
above the low-income level for
disabled households.
disabled households.
elderly and disabled families.

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CRS-9
FY2004 Housing Assistance
FY2006 Flexible Voucher
Housing Choice Voucher
For Needy Families
FY2005 Flexible Voucher
Program
Program Current Law
(H.R. 1841/S. 947)
Program
(S. 771/H.R. 1999)
Targeting
PHAs must target 75% of all
States would be required to target
PHAs would have no targeting
PHAs would be directed to target
vouchers to families at or below
at least 75% of vouchers to
requirements.
90% of all assistance to families
30% of area median income
families at or below 30% of AMI,
at or below 60% of AMI.
(AMI).
although the Secretary would be
able to grant waivers to
communities as long as at least
55% of vouchers were targeted to
families at or below 30% of AMI.
Subsidy Levels
Benefits are statutorily set as
States would be able to establish
PHAs would be able to establish
PHAs would be able to establish
rental subsidies equal to the
their own methodology for
their own methodology for
their own methodology for
difference between the lesser of
s e t t i n g r e a s o n a b l e a n d
s e t t i n g r e a s o n a b l e a n d
s e t t i n g r e a s o n a b l e a n d
rent or the payment standard [set
appropriate subsidy levels, and
appropriate subsidy levels, and
appropriate subsidy levels and
by the PHA at between 90%-
would not be required to use
would not be required to use
would not be required to use
110% of the fair market rent
FMR. However, they would be
FMR. However, they would be
FMR. However, they would be
(FMR)] and the family’s
required to set a maximum
required to set a maximum
required to set a maximum
contribution (30% of adjusted
subsidy level, and families could
subsidy level. If the PHA
subsidy level. If the PHA
gross income).
not be required to contribute
p r o v i d e d d o w n p a y m e n t
p r o v i d e d d o w n p a y m e n t
more than 30% of their gross
assistance, the maximum grant
assistance, the maximum grant
incomes.
would be $10,000.
would be $10,000.

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FY2004 Housing Assistance
FY2006 Flexible Voucher
Housing Choice Voucher
For Needy Families
FY2005 Flexible Voucher
Program
Program Current Law
(H.R. 1841/S. 947)
Program
(S. 771/H.R. 1999)
Tenant Contribution
T e n a n t c o n t r i b u t i o n s
a r e
Families would not be required to
PHAs could establish rents based
PHAs could establish rents based
statutorily set as the greater of
contribute more than 30% of their
on a percentage of income, flat
on a percentage of income, flat
30% of a family’s adjusted gross
gross incomes toward rent but
rents, tiered rents, or some
rents, tiered rents, or some
income, 10% of a family’s gross
could choose to pay more. A
combination of the three models,
combination of the three models,
income, or the minimum rent (set
minimum rent of at least $50 per
at their discretion. There would
at their discretion. There would
by the PHA, not to exceed $50,
month would be required for each
be no cap on tenant contributions.
be no cap on tenant contributions.
with a hardship exemption).
family.
PHAs would be required to set
PHAs would be required to set
Families cannot be required to
minimum rents.
minimum rents.
contribute more than 30% of their
incomes, although they can
choose to contribute up to 40% in
the first year and higher
thereafter.
Time Limits and
Current law does not include any
States would be able to set
PHAs would be able to set
PHAs would be able to set
Work Requirements
time limits or work requirements.
s t a n d a r d s f o r c o n t i n u e d
s t a n d a r d s f o r c o n t i n u e d
s t a n d a r d s f o r c o n t i n u e d
Lease-compliant families can
eligibility, including time limits
eligibility, including time limits
eligibility, including time limits
continue to receive assistance
and work requirements.
and work requirements.
a n d wo r k r e q u i r e me n t s .
(even if their incomes increase
Beginning in January 2008,
above eligibility limits) until their
PHAs would be permitted to
tenant contribution is equal to the
establish time limits of no less
rent, at which point their subsidy
than five years. Families whose
is zero.
gross incomes increased above
80% of AMI would lose
eligibility for assistance.

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FY2004 Housing Assistance
FY2006 Flexible Voucher
Housing Choice Voucher
For Needy Families
FY2005 Flexible Voucher
Program
Program Current Law
(H.R. 1841/S. 947)
Program
(S. 771/H.R. 1999)
Enhanced Vouchers
Families receive
enhanced
F u n d i n g f o r t e n a n t
Enhanced vouchers would be
Enhanced vouchers would be
vouchers when they are displaced
protection/enhanced vouchers
administered under current rules
administered under current rules
from other housing assistance
would be provided separately
for one year. After one year,
for one year. After one year,
programs (for example, when
fro m grant fund ing and
enhanced vouchers would be
enhanced vouchers would be
public housing is demolished or
administered under current rules.
administered under the local FVP
administered under the local FVP
contracts for private units end).
rules.
rules.
E n h a n c e d v o u c h e r s a r e
administered by the local PHA.
The payment standard for an
enhanced voucher is equal to the
rent for the unit (even if it is
greater than the PHA’s payment
standard), allowing a family that
would otherwise be displaced to
remain in that unit. The
“enhanced” feature of the
voucher remains for as long as
the family lives in the unit.

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FY2004 Housing Assistance
FY2006 Flexible Voucher
Housing Choice Voucher
For Needy Families
FY2005 Flexible Voucher
Program
Program Current Law
(H.R. 1841/S. 947)
Program
(S. 771/H.R. 1999)
Inspection of Units
PHAs must inspect
units
to
States would be required to
PHAs would be required to
PHAs would be required to
ensure that they meet federal
inspect units prior to occupancy
inspect units within 60 days of a
inspect units within 60 days of
housing quality standards prior to
and then every three years. States
family’s occupancy to ensure that
the first payment made to the
occupancy and at least annually
could use state, local, or federal
the units meet the local, state or
owner and at least once every
thereafter. PHAs can choose to
HQS.
federal HQS, as chosen by the
four years thereafter to ensure
use local, state, or federal housing
PHA. PHAs would be required to
that the units meet federal
quality standards (HQS), as long
reinspect one-quarter of all units
housing quality standards or other
as state or local standards are as
under contract annually.
standards approved by the
strict or stricter than federal
Secretary. PHAs would be
standards.
required to inspect at least one-
quarter of units each year.
Portability
Families receiving voucher
Families receiving voucher
Families receiving rental
Families receiving rental
assistance, after one year, can
assistance could move to any
assistance, after one year, could
assistance, after one year, would
move to any jurisdiction in the
state where a voucher program is
move to any jurisdiction in the
be permitted to move to another
country where a voucher program
being administered, without the
country where a voucher program
unit within the jurisdiction of the
is being administered.
one-year restriction.
is being administered.
PHA that issued the voucher.

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CRS-13
FY2004 Housing Assistance
FY2006 Flexible Voucher
Housing Choice Voucher
For Needy Families
FY2005 Flexible Voucher
Program
Program Current Law
(H.R. 1841/S. 947)
Program
(S. 771/H.R. 1999)
Grandfathering
Not
applicable.
Families who were
receiving
Under the FVP, PHAs would be
F a m i l i e s r e c e i v i n g
tenant-based vouchers prior to
permitted to grandfather in all
homeownership assistance or
enactment of HANF would be
current voucher holders under
project-based voucher assistance
eligible to retain those vouchers
current program rules, but would
on the day before enactment
under the current program rules
only be required to grandfather
would continue to receive
through FY2009. Families with
homeownership voucher holders
assistance under current law for
p r o j e c t - b a s e d v o u c h e r s ,
and project-based voucher
the length of their contracts.
certificates, or homeownership
holders for the length of their
Elderly and disabled households
assistance could retain their
contracts. Enhanced voucher
receiving assistance on the day
assistance under current program
recipients would be governed by
before enactment would continue
rules indefinitely.
current program rules for one
to be treated under current law
year.
until January 2009. Elderly and
If funding were insufficient to
disabled households receiving
support all existing vouchers,
assistance after the date of
states would not be required to
enactment would also be treated
continue to support all existing
under current law until January
vouchers, although they would be
2009, unless their PHA had
required to make efforts to do so.
devised a plan for meeting the
needs of the elderly and disabled
prior to a January 2009 deadline
for developing such a plan.
Enhanced voucher recipients
would be governed by current
program rules for one year.

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CRS-14
FY2004 Housing Assistance
FY2006 Flexible Voucher
Housing Choice Voucher
For Needy Families
FY2005 Flexible Voucher
Program
Program Current Law
(H.R. 1841/S. 947)
Program
(S. 771/H.R. 1999)
Funding Allocation
Under the current program, PHAs
In the first year, states would
For the first fiscal year, PHAs
The Secretary would be required
administer their baseline number
receive the same ratio of the total
would receive a pro-rata share
to establish a formula, through
of vouchers. The baseline was
funding available that they
based on their prior year’s
negotiated rulemaking with
not determined via any particular
received in the prior year. By the
funding level. The Secretary
stakeholders, within 24 months
formula; it is the number of
second year, the Secretary would
would be required to establish a
for allocating funds to PHAs. In
vouchers that a PHA has been
be directed to have established a
formula within 18 months for
the interim, PHAs would receive
given authority to lease (through
new formula allocation that
allocating any new funds to
a pro-rata share based on their
competitions and different
considers factors including: the
PHAs.
prior year’s funding level.
formula allocations) through the
number of families receiving
years. Prior to FY2003, PHAs
assistance in each state, the extent
were paid based on the actual cost
of poverty in the state, the cost of
of their vouchers. In FY2006,
housing in the state, the
they received a pro-rata share of
performance of the state in
the amount appropriated, based
administering HANF, the amount
on what they received in FY2005.
of unobligated HANF funds the
In FY2005, they received an
state has accumulated, and any
amount based on their actual
other objectively measurable
costs over a three- month period
criteria the Secretary may
in FY2004.
specify.

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CRS-15
FY2004 Housing Assistance
FY2006 Flexible Voucher
Housing Choice Voucher
For Needy Families
FY2005 Flexible Voucher
Program
Program Current Law
(H.R. 1841/S. 947)
Program
(S. 771/H.R. 1999)
Administrative Fees
Prior to FY004, administrative
Administrative fees would be
Administrative fees would be
HUD would be required to
fees were paid to PHAs on a per-
capped at 10% of the grant
capped at 7% of the grant
develop a final formula for
unit basis calculated roughly as a
amount.
amount. Performance- and
allocating administrative fees
percentage of FMR. Recently,
incentive-based fees would be
within 24 months via negotiated
PHAs have received the same
available at the Secretary’s
rulemaking. In the interim, PHAs
proportion of total funds that they
discretion.
would receive a pro-rata share of
had received in the previous year.
the amount available for
In FY2006, the amount available
administrative fees, based on
for administrative fees was
what they received in the
equivalent to just less than 9% of
previous year, although the
the amount provided for
Secretary would have the
vouchers.
authority to retain up to 5% to
provide special fees for non-
routine expenses.

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CRS-16
FY2004 Housing Assistance
FY2006 Flexible Voucher
Housing Choice Voucher
For Needy Families
FY2005 Flexible Voucher
Program
Program Current Law
(H.R. 1841/S. 947)
Program
(S. 771/H.R. 1999)
Grantee Performance
PHAs are evaluated
annually
The Secretary would be required
The Secretary would be required
The Secretary would be required
t h r o u g h t h e S e c t i o n 8
to estab lish p erfo rmance
to establish performance
to estab lish p erfo rmance
M a n a g e m e n t A s s e s s me n t
standards for states, including:
standards for PHAs, including:
standards and a performance
Protocol (SEMAP), which is a set
-Budget utilization,
-Budget utilization,
assessment system.
of 14 criteria established by
-Financial management,
-Financial management, and
HUD.
-Number of families served,
-Effectiveness of voucher
If a PHA received a failing score,
-Quality of housing,
assistance in helping families,
the Secretary would determine
If PHAs perform poorly, they
-Reduction in homelessness,
including the elderly and
how best to administer the grant,
may face financial penalties until
-Improved living conditions for
d i s a b l e d , m o v e t o w a r d
including:
they improve or may come under
elderly and disabled families,
independent living, economic
-turning over administration of
receivership.
-Effectiveness of voucher
s e l f - s u f f i c i e n c y a n d
the grant to another PHA or other
assistance in helping families
homeownership.
entity;
An estimated 2 million vouchers
move toward homeownership and
-appointing a receiver; or
are up for renewal in FY2006.
self-sufficiency,
If a PHA were to receive a failing
-setting a deadline for the PHA to
-Removal of barriers to
score for two consecutive years,
improve.
affordable housing.
the Secretary would determine
how best to administer the grant,
The FVP contains no requirement
If a state were not making
which could include alternative
regarding the number of people
sufficient progress, HUD could
administration or extending the
served.
retake administration of the
deadline for improvement.
program.
The FVP contains no requirement
States would be required to serve
regarding the number of people
the same number of people that
served.
were being served prior to
enactment.
Source: Congressional Research Service analysis of current law (42 USC 1437f); H.R. 1841 and S. 947 (108th Congress); President’s FY2005 Budget Request for the Department
of Housing and Urban Development, Administrative Provisions, Section 233; H.R. 1999 and S. 771 (109th Congress)

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