Difference Between Section 8 And Section 42 Housing

There are several types of housing assistance available, and the differences between them may seem subtle at first but become more apparent as you look deeper into their purposes. Here is the difference between Section 8 and Section 42 housing.

Section 8 Housing

The government created the Housing Act of 1937, sometimes known as the “Wagner-Steagall Act,” to address unsanitary and dangerous housing for lower-income families. In turn, this would fund states and help funnel money back into the economy as part of President Franklin D. Roosevelt’s New Deal Program.

Who Funds It?

Section 8 of the Housing Act is housing that is funded by the State. The State then pays the landlord or property owner directly. This is done through vouchers that qualifying renters obtain.

How People Qualify

To qualify, you must apply with your local housing agency. Requirements change yearly when the U.S. Department of Housing and Urban Development (also known as H.U.D.) decides on an income limit. Many factors go into what determines the appropriate qualifying income. This can include the average income in your local area, how large your family is, and much more. Once you meet the qualifications and are approved for Section 8 Housing, you may begin renting with an approved landlord.

Tenant Responsibilities

A Section 8 tenant must meet 30% of all rent and utilities acquired at that address. H.U.D also sets this percentage. You will pay your rent monthly to your landlord directly. The Public Housing Office you have applied through will work with your landlord to supplement the remaining balance.

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Section 42 Housing

Section 42 Housing is housing built by private developers using a federal tax program. This allows property owners and state governments to build affordable housing for low-income families. Landlords must rent these apartments at a cost that falls below the average cost in a designated area.

Who Funds It?

Section 42 Housing is part of the Low Housing Tax Credit. It most often helps those who live in densely populated areas with high rent costs. The Internal Revenue Code Section 42 creates an incentive for builders to supply housing that meets certain criteria when building them and renting apartments out.

How People Qualify

Each tenant pays rent based on a percentage scale comparing their annual income versus the county’s median annual income (M.A.I.). Tenants may make no more than 60% of the average income of their county. However, the developer may not charge more than 30% of each tenant’s income. Because of this, some tenants may pay more than others for the same size apartment.


Both Section 8 and Section 42 serve to make affordable housing accessible to all. Speak to a landlord directly about Section 42 housing. Click on the following link to get some tips on how to speed up your Section 8 application process!

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