3 Biggest Programs That Assist Low-Income People

Federal housing assistance reaches more households than most people realize. According to the Center on Budget and Policy Priorities, these three programs combined assist over 6 million households every year. Each program operates differently, targets slightly different populations, and carries distinct advantages and limitations. Below is a detailed look at all three.

Program #1: Section 8 Housing Choice Vouchers

The Section 8 Housing Choice Voucher Program is the largest federal rental assistance initiative. Funded by HUD and administered by roughly 2,200 local Public Housing Authorities across the country, it allows qualifying families to choose their own rental housing on the private market. The PHA pays the landlord a subsidy each month, and the tenant contributes approximately 30 percent of their adjusted gross income toward rent.

How Section 8 Works

After a family is approved and receives a voucher, they search for a rental unit that meets HUD Housing Quality Standards. The landlord must agree to participate in the program and accept the PHA's payment standard. Once the unit passes inspection and the lease is signed, monthly payments flow from the PHA directly to the landlord. The tenant pays the remaining balance.

Section 8 Eligibility

Household income must fall below 50 percent of the Area Median Income. Federal rules require PHAs to direct 75 percent of new vouchers to families at or below 30 percent of AMI. Preference categories, including families with children, elderly individuals, persons with disabilities, and those who are homeless or living in substandard housing, affect waitlist position.

Section 8 Pros and Cons

• Pro: Tenant chooses where to live, including in neighborhoods with better schools and lower crime
• Pro: Voucher is portable and can move with the tenant to a different PHA jurisdiction
• Con: Waiting lists are long, sometimes spanning multiple years
• Con: Not all landlords accept vouchers, limiting housing options in some markets

Program #2: Public Housing

Public housing provides government-owned and government-managed rental units directly to eligible low-income families, seniors, and individuals with disabilities. Unlike Section 8, there is no private landlord. The PHA owns the property, sets the rules, and handles maintenance. Rent is calculated at 30 percent of the tenant's adjusted gross income, with minimum rents typically ranging from $0 to $50.

Public Housing Eligibility

Income limits are generally set at 80 percent of AMI, though most new admissions serve households below 50 percent. Applicants must pass background screening and provide documentation of income, citizenship status, and household composition. Local preferences for veterans, elderly applicants, persons with disabilities, and involuntarily displaced families often influence waitlist order.

Public Housing Pros and Cons

• Pro: Guaranteed rent calculation at 30 percent of income provides stability
• Pro: No need to find a willing private landlord
• Con: Limited location choices as tenants must live in available PHA-owned units
• Con: Some developments face maintenance backlogs due to underfunding

Program #3: LIHEAP (Low Income Home Energy Assistance)

LIHEAP does not cover rent, but it addresses one of the largest supplementary costs of housing: energy bills. The program provides direct payments to utility companies on behalf of eligible households. In Alabama, community action agencies distribute LIHEAP funds, and the program typically opens for applications between October and March when heating costs peak. Benefits range from roughly $200 to $1,000 depending on household size, income, and energy costs.

LIHEAP Eligibility

Households with income at or below 150 percent of the federal poverty level, or 60 percent of the state median income, generally qualify. Elderly households, families with young children, and persons with disabilities receive priority. LIHEAP also offers weatherization assistance, which funds home improvements like insulation and window sealing to permanently reduce energy bills.

For in-depth research on how these programs perform and their impact on poverty reduction, the Center on Budget and Policy Priorities housing research page publishes regularly updated data and analysis.