Two separate federal agencies run the country's largest affordable housing programs, and they serve very different populations. HUD (the Department of Housing and Urban Development) focuses on urban and suburban renters through vouchers and public housing. USDA Rural Development focuses on homebuyers and renters in rural communities through loans and rental subsidies. If you're trying to figure out which program applies to your situation, the answer usually comes down to one thing: where you live.
This guide breaks down both agencies' programs, their income limits for 2026, who qualifies, and how to apply. Use the benefits screener at BenefitsUSA.org to check which programs you may qualify for based on your address and household size.
What Is HUD Housing Assistance?
HUD manages several rental assistance programs that help low-income families afford housing in cities, suburbs, and towns across the country. The two main programs are the Housing Choice Voucher Program (Section 8) and Public Housing.
Housing Choice Vouchers (Section 8) are the largest federal rental assistance program. Families receive a voucher they can use at any private landlord who accepts it. The family pays roughly 30% of their adjusted monthly income toward rent, and HUD pays the rest directly to the landlord.
Public Housing consists of government-owned apartment buildings and housing developments managed by local Public Housing Authorities (PHAs). Residents pay 30% of their income in rent. These units exist throughout cities and towns but the supply is limited.
HUD also runs:
- Section 202 Supportive Housing for the Elderly
- Section 811 Supportive Housing for Persons with Disabilities
- HOME Investment Partnerships Program
- Community Development Block Grants
What Is USDA Rural Housing?
USDA Rural Development runs housing programs specifically for rural areas, defined as communities with populations of 20,000 or fewer. There are two main loan programs for homebuyers and two programs for renters.
Section 502 Guaranteed Loan Program helps moderate-income buyers get mortgages through approved lenders with no down payment required. The USDA guarantees the loan rather than making it directly.
Section 502 Direct Loan Program goes directly from the USDA to very low-income borrowers. It includes payment assistance that can reduce the effective interest rate to as low as 1%, with loan terms up to 38 years.
Section 515 Rural Rental Housing provides loans to landlords and developers to build or renovate affordable rental properties in rural areas. Though new Section 515 loans stopped in 2011, over 533,000 units still exist under this program.
Section 521 Rental Assistance pairs with Section 515 housing to make units affordable. Tenants pay 30% of their income and the USDA covers the gap between that amount and the actual rent. FY 2026 appropriations set this program at $1.715 billion.
HUD vs USDA: Side-by-Side Comparison
| Feature | HUD Programs | USDA Rural Housing |
|---|---|---|
| Administering agency | Dept. of Housing and Urban Development | USDA Rural Development |
| Geographic focus | Urban, suburban, nationwide | Rural areas (pop. 20,000 or fewer) |
| Primary programs | Section 8 vouchers, Public Housing | Section 502 loans, Section 521 rental assistance |
| Who it serves | Renters primarily | Homebuyers and rural renters |
| Income target | Very low to low income (30-80% AMI) | Very low to moderate income (up to 115% AMI for guaranteed loans) |
| Down payment | N/A (rental assistance) | 0% for USDA loans |
| Property type | Rentals | Primary residence purchases and rural rentals |
| Waitlists | Often years-long | Shorter in many areas |
2026 Income Limits: HUD Programs
HUD income limits are based on Area Median Income (AMI) and vary by county and household size. HUD defines three income tiers:
- Extremely low income: Up to 30% of AMI
- Very low income: Up to 50% of AMI
- Low income: Up to 80% of AMI
To receive a Housing Choice Voucher, your income must fall at or below 50% of the Area Median Income for your area. By law, PHAs must direct 75% of available vouchers to households at or below 30% AMI.
The table below shows approximate 2026 income limits for a family of four in selected metropolitan areas. Actual limits depend on your specific county. Use the HUD Income Limits tool for your exact area.
| Metro Area | 30% AMI (4 people) | 50% AMI (4 people) | 80% AMI (4 people) |
|---|---|---|---|
| Los Angeles, CA | approx. $34,200 | approx. $57,000 | approx. $91,200 |
| New York, NY | approx. $40,400 | approx. $67,300 | approx. $107,650 |
| Houston, TX | approx. $25,650 | approx. $42,750 | approx. $68,400 |
| Chicago, IL | approx. $29,800 | approx. $49,650 | approx. $79,450 |
| Atlanta, GA | approx. $25,400 | approx. $42,350 | approx. $67,750 |
| Rural areas | typically lower | typically lower | typically lower |
These are approximate figures. HUD updates limits annually and they vary significantly by location.
2026 Income Limits: USDA Housing Programs
USDA income limits are also based on AMI but use a different scale. The guaranteed loan program serves up to 115% of the area median income, making it accessible to moderate-income households who earn too much for HUD programs.
Section 502 Guaranteed Loan (standard limits for 2026):
| Household Size | Standard Income Limit |
|---|---|
| 1-4 people | up to $119,850 |
| 5-8 people | up to $158,250 |
High-cost counties in states like California, Hawaii, and Alaska have higher limits. The USDA adjusts these annually and updates are typically posted at the start of each fiscal year.
Section 502 Direct Loan (very low and low income):
| Household Size | Low Income (approx.) | Very Low Income (approx.) |
|---|---|---|
| 1 person | approx. $40,900 | approx. $24,550 |
| 4 people | approx. $51,100 | approx. $35,750 |
| 8 people | approx. $67,450 | approx. $47,200 |
Direct loan limits are set at 80% of AMI for low-income and 50% of AMI for very-low-income applicants. They vary by county, so always verify at the USDA eligibility site for your specific location.
Who Qualifies for HUD Programs?
To qualify for a Housing Choice Voucher or Public Housing:
- Your household income must fall at or below 50% of the Area Median Income for the Section 8 voucher program (80% for some public housing)
- You must be a U.S. citizen or have eligible immigration status
- You must not have been evicted from public housing in the past three years for drug-related offenses
- Household members must pass criminal background checks (specific rules vary by PHA)
- You must apply through your local Public Housing Authority
There is no geographic restriction for HUD programs other than applying through the PHA that covers the area where you want to live.
Who Qualifies for USDA Rural Housing?
To qualify for USDA housing programs:
- The property must be in an eligible rural area (generally a town with a population under 20,000). You can check any address at the USDA eligibility map
- Your income must fall within program limits (varies by program and county)
- For loans, the home must be your primary residence
- You must be a U.S. citizen or permanent resident
- For the 502 Guaranteed Loan, you typically need a credit score of at least 640, though exceptions exist
- For the 502 Direct Loan, no minimum credit score is required, but repayment ability must be demonstrated
USDA loans are only for primary residences. You cannot use them for vacation homes or investment properties.
How to Apply for HUD Programs
Step 1: Find your local Public Housing Authority. Go to HUD.gov and search for PHAs in your area. Each PHA operates independently with its own waitlist and application process.
Step 2: Check if the waitlist is open. Many PHAs have waitlists that are closed for months or years at a time. Sign up for waitlist opening notifications if the list is currently closed.
Step 3: Submit an application. When the waitlist opens, complete the application with your household income, family size, and documentation. Required documents typically include government-issued ID, Social Security numbers, proof of income, and bank statements.
Step 4: Wait for your name to reach the top. Some areas have waits of several years. During this time, report any changes in your address, income, or household composition.
Step 5: Attend a briefing and search for housing. Once a voucher is issued, you attend a briefing explaining how the program works, then find a landlord who accepts vouchers. You typically have 60 to 120 days to find a unit.
How to Apply for USDA Housing Programs
Section 502 Guaranteed Loan:
Step 1: Confirm the property is in an eligible area. Use the USDA's eligibility map at eligibility.sc.egov.usda.gov to check any address.
Step 2: Find an approved USDA lender. The USDA does not make guaranteed loans directly. You apply through a USDA-approved bank, credit union, or mortgage lender. A list of approved lenders is available through USDA Rural Development offices.
Step 3: Get pre-approved and gather documents. You'll need income verification, tax returns, bank statements, credit history, and employment records. The lender submits your file to USDA for a conditional commitment.
Step 4: Find a home and complete the purchase. The home must meet USDA property standards. An appraisal is required.
Step 5: Close on the loan. Closing typically takes 30 to 45 days for a USDA guaranteed loan, sometimes longer.
Section 502 Direct Loan:
Step 1: Contact your local USDA Rural Development office. Direct loans are applied for through USDA offices, not banks. Find your office at rd.usda.gov.
Step 2: Complete Form RD 410-4 (Application for Rural Assistance). Staff will walk you through required documents including income verification, assets, and household composition.
Step 3: Determine payment assistance eligibility. Based on your income, the USDA calculates payment assistance that reduces your monthly payment. This is recalculated annually.
Step 4: Find an eligible property and receive an appraisal. Properties must pass USDA inspections and meet minimum property requirements.
Step 5: Close on the loan. Direct loans may take longer to process than guaranteed loans because of the added review steps.
Which Program Should You Apply For?
The choice often depends on where you want to live and whether you're renting or buying.
Choose HUD programs if:
- You live in or want to live in a city, suburb, or larger town
- You need rental assistance rather than a home purchase loan
- Your income is at or below 50% of AMI
- You are not ready or able to purchase a home
Choose USDA programs if:
- You want to buy a home in a rural or small-town area
- Your income is moderate (up to 115% of AMI) and you cannot qualify for other financing
- You need rental assistance in a rural area and Section 515 housing exists in your community
- You want 100% financing with no down payment required
Both may apply if:
- You live in a rural area and need rental assistance while on a waiting list for a USDA-backed rental unit or while saving to buy
Some households qualify for multiple programs. Use the free screener at BenefitsUSA.org to see which programs may fit your situation based on your income, household size, and location.
Frequently Asked Questions
Can I use a HUD voucher in a rural area?
Yes. Housing Choice Vouchers can be used anywhere in the country, including rural areas, as long as the landlord accepts them. However, USDA rental programs (Section 515 and 521) are a separate option specifically designed for rural housing stock that may have more affordable rent ceilings.
Can I get a USDA loan if I live near a city?
It depends on the specific address. USDA eligibility is based on the property location, not the borrower's current residence. Some areas on the outskirts of metro regions qualify as rural under USDA definitions. Check any address at the USDA eligibility map to confirm.
What income counts toward HUD eligibility?
HUD counts most sources of income including wages, salaries, Social Security, pension payments, disability benefits, and child support. Some income sources may be excluded or treated differently. Your local PHA will provide a full list when you apply.
What income counts toward USDA eligibility?
For USDA loans, the agency looks at gross household income for all adult household members living in the home, not just the borrowers on the loan. This includes wages, business income, Social Security, and other regular income. Some deductions are allowed for dependents, disabilities, and childcare expenses.
How long are HUD Section 8 waitlists?
Waitlists vary widely. In high-demand cities like New York, Los Angeles, and Chicago, waits can exceed five to ten years. Smaller PHAs in less populated areas may have shorter waits or open lists. Checking multiple PHAs in your region can improve your chances of getting assistance sooner.
Does USDA rural housing have a waitlist?
For the Section 502 Direct Loan, there can be a waiting period depending on funding availability in your area. The guaranteed loan program generally has no waitlist because it works through private lenders. For Section 521 rental assistance, availability depends on what units exist in your area.
Can I own other property and still qualify?
For HUD rental programs, you generally cannot own a home while receiving a housing voucher unless a disability or exceptional circumstance applies. For USDA loans, the home must be your primary residence and you cannot own another adequate home nearby.
Are USDA housing programs only for farms?
No. The USDA Rural Development programs serve anyone living in an eligible rural or small-town area, regardless of occupation. You do not need to be a farmer or have any connection to agriculture.
What happens if my income increases after I qualify?
For HUD vouchers, your rent payment adjusts as your income changes. You always pay approximately 30% of your adjusted monthly income. For USDA Direct Loans, payment assistance is recalculated annually. If your income rises enough, you may no longer qualify for payment assistance, but you keep the loan.
Where can I check my eligibility for both programs?
The free screener at BenefitsUSA.org checks multiple programs at once based on your income, household size, and location. For USDA property eligibility, use eligibility.sc.egov.usda.gov. For HUD income limits by county, use huduser.gov.
