How Much Does Section 8 Pay in Alabama?

The Section 8 Housing Choice Voucher program does not pay a fixed dollar amount to every participant. Instead, the program uses a formula that balances the cost of local housing against the household's ability to pay. The goal is for families to spend no more than 30 percent of their adjusted gross income on rent and utilities, with the PHA covering the gap up to the local payment standard.

What Are Fair Market Rents?

Fair Market Rents (FMRs) are dollar amounts published by HUD every year for each metropolitan area and nonmetropolitan county. They represent the estimated cost of renting a modest, decent-quality unit at the 40th percentile of the local rental market, meaning 40 percent of standard-quality units rent for less than the FMR and 60 percent rent for more.

FMRs serve as the baseline for Section 8 payment standards. For the Huntsville metropolitan area, approximate FMRs by bedroom size are as follows:

Unit Size	Fair Market Rent (Annual)
Studio / Efficiency	$780/month
1 Bedroom	$870/month
2 Bedrooms	$1,040/month
3 Bedrooms	$1,370/month
4 Bedrooms	$1,610/month

These are approximate figures based on recently published HUD data. Your PHA can confirm the exact current FMR for your area.

Payment Standards vs. Fair Market Rents

PHAs do not use FMRs directly. Instead, they set their own payment standards, which can range from 90 percent to 110 percent of the FMR (with HUD approval, even higher in some cases). The payment standard represents the maximum subsidy the PHA will provide for a given unit size.

For example, if the FMR for a two-bedroom unit in Huntsville is $1,040 and the PHA sets its payment standard at 100 percent of FMR, the maximum amount the PHA will contribute toward rent and utilities for a two-bedroom voucher is $1,040. If the PHA sets its standard at 110 percent, the maximum would be $1,144.

How Your Tenant Portion Is Calculated

The amount you pay out of pocket depends on your household's adjusted gross income. Here is how the calculation works step by step:

1. Calculate annual gross income: Add all income sources for every household member (wages, benefits, child support, etc.).
2. Apply deductions: Subtract allowable deductions such as the dependent allowance ($480 per dependent), elderly/disabled allowance ($400), and qualifying medical or childcare expenses.
3. Determine adjusted monthly income: Divide the adjusted annual income by 12.
4. Calculate Total Tenant Payment (TTP): The TTP is the highest of: 30% of adjusted monthly income, 10% of gross monthly income, or the PHA minimum rent (typically $25-$50).
5. Subtract utility allowance: If utilities are not included in rent, the PHA subtracts the utility allowance from the TTP to determine your share of rent paid to the landlord.

What Happens If Rent Exceeds the Payment Standard

You are allowed to choose a unit with a gross rent higher than the payment standard, but you must pay the difference yourself. At the time of initial lease-up, HUD requires that your total housing cost (tenant portion plus any amount above the payment standard) cannot exceed 40 percent of your adjusted monthly income. This cap protects families from taking on units they cannot afford.

After the first year, the 40 percent cap no longer applies at annual recertification, but the PHA will not increase its subsidy above the payment standard regardless of rent increases by the landlord.

Utility Allowances

Utility allowances are a frequently overlooked part of the payment calculation. Each PHA publishes a schedule of utility allowances that reflects the average cost of heating, cooling, water, electricity, and gas for different unit types in the area. If you are responsible for paying utilities, the allowance reduces your rent payment. In some cases, if your TTP is very low and the utility allowance is high, you may receive a utility reimbursement check from the PHA.

For more information about HCV program rules nationwide, visit the HUD Housing Choice Voucher page.

Annual Adjustments

Payment standards and your tenant portion are not fixed permanently. At each annual recertification, the PHA recalculates your income and adjusts your rent accordingly. If your income rises, your rent goes up. If your income drops, your rent decreases. The income limits guide explains in detail how HUD determines income categories and what counts toward your household total.