LIHTC vs Section 8 vs public housing: what's the difference?

People use these names interchangeably, and housing ads don’t always help. The differences decide what you’ll pay, how you apply, and what happens if your income changes.

The quick comparison

	LIHTC (tax credit) apartment	Housing Choice Voucher (tenant-based Section 8)	Project-based Section 8	Public housing
Who owns the building	Private owner or nonprofit	Any landlord who accepts the voucher	Private owner with a HUD contract	Local public housing agency
What the subsidy is	Federal tax credits to the owner, in exchange for capped rents	A voucher that pays part of your rent	A contract attached to the building’s units	Federal operating and capital funds to the housing authority
How your rent is set	Fixed maximum for the unit, based on 30% of an income limit for the unit size, not on your income	You generally pay about 30% of adjusted income (more if you pick a unit above the payment standard)	You generally pay about 30% of adjusted income	Generally about 30% of adjusted income, or a flat rent you choose
Who qualifies	Income at or under the unit’s limit, usually 60% of area median income (some units 20% to 80%)	Income limits set by HUD, with most new vouchers going to extremely low-income households	HUD income limits for the property	HUD income limits, with a share of new admissions reserved for extremely low-income households
Where you apply	At each property’s management office	Local housing authority	Each building’s management office	Local housing authority
If your income rises	You can usually stay; rent stays the same	Your share rises; assistance can end	Your share rises	Your rent rises
Can it move with you	No	Yes, a voucher can move	No	No

The voucher and public housing rules are in HUD’s regulations (24 CFR Part 982 for vouchers, 24 CFR Part 960 for public housing admissions). LIHTC rules are in the tax code, IRC section 42.

How the rent works, with numbers

All numbers below are examples, not limits for any real county. Say the 60% income limit for a 2-person household is $50,000, and a 1-bedroom LIHTC unit’s maximum rent, including utilities, is $1,170 a month.

Household	Income	LIHTC rent alone	With a voucher at the same LIHTC unit
A	$46,000	Up to $1,170 (about 31% of income)	About 30% of adjusted income
B	$24,000	Up to $1,170 (about 59% of income)	About 30% of adjusted income, roughly $600 or less

Household B qualifies for the LIHTC apartment but would pay more than half its income in rent without a voucher. That is the core difference: LIHTC caps the rent for the unit, Section 8 caps the rent for you. Calculate the real maximum rent in your county with the rent calculator, and read how LIHTC rents are set.

Using a voucher at a tax credit property

Every LIHTC property’s recorded use agreement has to prohibit refusing to rent to someone because they hold a Section 8 voucher (IRC 42(h)(6)(B)(iv)). You still have to meet the LIHTC income limit and the property’s normal screening. The voucher pays the difference between your share and the rent, and the property can collect rent up to the voucher program’s limit, because voucher payments don’t count toward the LIHTC rent cap.

Buildings with more than one program

Many older apartment buildings have a project-based Section 8 contract and LIHTC at the same time, often after a renovation. Many public housing developments have been converted to project-based Section 8 under HUD’s Rental Assistance Demonstration (RAD) and renovated with tax credits. Congress made RAD permanent in July 2026 (Public Law 119-101). In those buildings, you generally pay about 30% of your adjusted income and you also have to meet the LIHTC income limit.

Eligibility rules that differ

Rule	LIHTC	Vouchers and public housing
Which income is counted	Gross annual income of all household members, under HUD’s definitions	Annual income, then adjusted income (after deductions for dependents, elderly or disabled households, and some medical and child care costs) to set rent
Students	All-full-time-student households are barred unless one of five exceptions applies (IRC 42(i)(3)(D))	HUD’s own student rule (24 CFR 5.612), which looks at individual students and parental income
Criminal background and rental history	Owner’s written screening criteria, within fair housing law and any state rules	Housing authority screening, under HUD rules that include some mandatory denials
Preferences	Some properties have preferences for seniors, people with disabilities or other groups allowed under IRC 42(g)(9)	Housing authorities set local preferences, such as for homeless or local residents

The practical upshot is that being turned down by one program doesn’t mean you’d be turned down by another. A household that’s over the voucher income limit may still fit a 60% LIHTC unit, and a student household barred from LIHTC may still qualify for a voucher.

Which should you apply for?

• Very low income, or no income right now: get on your housing authority’s voucher and public housing lists, and apply to project-based Section 8 buildings. Apply to LIHTC properties too, since a voucher can be used there later.
• Steady income around half to 60% of your area’s median: LIHTC apartments are often the fastest option, because many properties have shorter waits than voucher lists.
• Senior or disabled: look for senior LIHTC properties and HUD Section 202 or 811 buildings. See senior LIHTC housing.
• Full-time students: check the student rule first; it can block an all-student household from a LIHTC unit.

Next steps

1. Check whether your income fits: Am I eligible?
2. Look up your county’s limits: income limits.
3. Find properties: tax credit apartments by state.
4. Contact your local public housing agency about voucher and public housing lists. HUD lists agencies by state at hud.gov.
5. Read how to qualify for a tax credit apartment for what to bring.

All of these programs must follow the Fair Housing Act. To report discrimination, contact HUD at 1-800-669-9777.