Step 8: Determine the Amount of Resident Rent (2024)

FAQs

Step 8: Determine the Amount of Resident Rent? ›

To determine the amount of resident rent: Calculate the following values: 30 percent of Monthly Adjusted Income (divide the Adjusted Annual Income by 12 and multiply by 0.3) 10 percent of Monthly Gross Income (divide the Total Annual Income by 12 and multiply by 0.1)

If the gross rent for the unit is below the payment standard, your share of the rent will be the higher of: 30% of your monthly adjusted income or 10% of your monthly gross income. However, the first time you sign the lease for the unit you must pay less than 40% of your monthly adjusted income for your rent share.

The maximum housing assistance is generally the lesser of the payment standard minus 30% of the family's monthly adjusted income or the gross rent for the unit minus 30% of monthly adjusted income.

Through the Illinois Section 8 program, you can receive vouchers straight from the government that you can use in place of cash to pay rent. You can use Section 8 to live in the same apartment complexes and rent from the same private landlords as someone who's not a recipient of the program.

You can determine your AGI by calculating your annual income from wages and other income sources (gross income), then subtracting certain types of payments, such as student loan interest, alimony, retirement contributions, or health savings account contributions, you've made during the year.

30% Income Rule

According to the rule, you can multiply your gross monthly income by 0.30 to determine the maximum rent you can afford. For example, if your gross income is $5,000 a month, your rent should be a maximum of $1,500 (5,000 x 0.30 = 1,500).

Once you determine which deductions you qualify for, add up the amounts to determine your total income "adjustment." Subtracting your deductions from your total annual income gives you your annual adjusted gross income. Dividing this number by 12 will result in your monthly AGI.

What is 30% of my income calculator? ›

How do you calculate 30% of your income? Simply multiply your gross monthly income (before taxes) by 0.30. That number will equal 30% of your monthly income, which is a good amount to spend on rent each month.

Section 8 is not only for renters. HUD also allows Section 8 tenants to pursue the dream of homeownership by utilizing their vouchers to purchase a home. If you meet these requirements, you can leverage your voucher as a method to build equity in your own home instead of passing along these funds to a landlord.

The same program rules and regulations for determining eligibility status for Section 8 rental assistance apply to everyone. To be eligible, the household must be either a family or a single person whose income does not exceed the area limits as set by U.S. Department of Housing and Urban Development (HUD).

Calculate the following values: 30 percent of Monthly Adjusted Income (divide the Adjusted Annual Income by 12 and multiply by 0.3) 10 percent of Monthly Gross Income (divide the Total Annual Income by 12 and multiply by 0.1)

Must landlords accept a section 8 renter? No, but a landlord must consider the section 8 tenant when they apply for an apartment. A landlord cannot hold a section 8 voucher against the tenant and must fairly consider the voucher as income that could go towards rent.

The medical expenses allowance is the amount by which total medical expenses exceed 3% of annual income. For example, the Smith family has anticipated annual income of $25,000 and anticipated medical expenses of $3,000 (not covered by insurance).