Source of income laws and housing vouchers: what landlords need to know
Federal fair housing law does not list source of income, but some states and cities do, including California, Washington and Oregon, and in those places you cannot refuse a renter because part of the rent comes from a Housing Choice Voucher (Section 8) or another subsidy. California, Washington and Oregon also change how you apply an income test: you measure the tenant's share of the rent, not the full rent. Here is how a voucher pays, what those three states require, and a worked income test.
How a Housing Choice Voucher pays you
HUD's Housing Choice Voucher page describes the split. The tenant pays a family share, usually 30 percent of adjusted monthly income and up to 40 percent. The local housing agency pays you the rest directly as a housing assistance payment, up to the agency's payment standard. The agency checks that your rent is reasonable compared with similar unassisted units and may negotiate it.
- The unit must pass an inspection before assistance starts, and again periodically, usually every one to two years, and after complaints.
- Under HUD's page, safety failures must be fixed within 24 hours and other failures typically within 30 days.
- If the tenant's income drops, the agency's share usually rises, which HUD notes nearly guarantees a rent payment.
Example a made-up two-bedroom rents for $1,800. The tenant's family share is $540. The housing agency pays the other $1,260 to the owner each month. The owner gets $1,800 in total, from two payers.
Federal law versus state and city law
The Fair Housing Act protects race, color, religion, sex, disability, familial status and national origin. Source of income is not on that list, so whether you may turn down a voucher depends on your state and city. Where a law exists, it usually bars refusing to rent, setting different terms, advertising 'No Section 8', and misrepresenting that a unit is unavailable.
California, Washington and Oregon compared
| California | Washington | Oregon | |
|---|---|---|---|
| Law | Fair Employment and Housing Act | RCW 59.18.255 | ORS 659A.421 |
| Vouchers protected | Yes, any federal, state or local housing subsidy | Yes, benefits or subsidy programs including housing assistance | Yes, federal rent subsidies under 42 U.S.C. 1437f and other housing assistance |
| Income test | Only the tenant's portion of the rent may be used | Subtract the voucher or subsidy from the rent before applying the test | A refusal for inability to pay must take the housing assistance into account |
| Ads | No ad indicating a limit based on source of income | Same | Same |
| Notable extra | Applicants with a subsidy may offer other proof (benefit letters, bank statements, pay stubs) instead of credit history, since January 1, 2024 | May refuse if the subsidy requires an inspection and estimated repairs exceed $1,500, with conditions; liability up to 4.5 times the monthly rent | Covers sexual orientation, gender identity and marital status too |
Sources: California Civil Rights Department, Fair Housing and Source of Income FAQ and housing page; RCW 59.18.255; ORS 659A.421. Other states and cities have their own versions, so check yours.
Running an income test the legal way
Most owners require income of some multiple of the rent. In these states, applying that multiple to the full rent for a voucher holder is the mistake. The California FAQ gives an example of exactly this, and calls a test that is not based only on the tenant's portion an unlawful practice.
Example a made-up building requires income of 2.5 times the rent on a $1,800 unit. For an applicant without a subsidy, that is $4,500 a month. For a voucher holder whose share is $540, the test is 2.5 times $540, or $1,350 a month. Asking the voucher holder for $4,500 would count the $1,260 the housing agency pays as if the tenant had to cover it.
You can still screen. The California FAQ says owners keep the right to apply their lawful screening criteria to every applicant, and Oregon's statute allows refusals based on past conduct when they are consistent with fair housing law. What changes is that the voucher itself cannot be the reason, and money tests must account for it.
What to do when a voucher holder applies
- Process the application in the same order and with the same criteria as any other.
- Apply your income multiple to the tenant's share, using the voucher paperwork.
- Sign the housing agency forms (refusing to complete required paperwork is itself listed as a violation in California).
- Schedule the inspection quickly and fix anything flagged within the deadlines.
- Agree the rent with the agency; it checks rent reasonableness but does not set your market rent.
- Record the agency payment and the tenant payment separately in your books, so you can see each one arrive.
Two payers, one ledger in DoorKeeping
A voucher tenancy has two payments every month. In DoorKeeping, each property keeps its own ledger, and rent goes straight to your own bank, never through DoorKeeping. Each tenant gets a memo like 12B SMITH and an exact amount with its own cents, so their share is easy to tell apart from other deposits. Bank feeds match each deposit to the right rent charge, so the housing authority's share and the tenant's share each land on their own line. DoorKeeping costs $2 per unit per month and gives no legal advice, so confirm your local source of income rules with your attorney.
Sources
- HUD, Housing Choice Vouchers: Tenants, read Oct 29, 2026
- Fair Housing Act, 42 U.S.C. 3604 (Cornell LII), read Oct 29, 2026
- California Civil Rights Department, Fair Housing and Source of Income FAQ (January 2024), read Oct 29, 2026
- California Civil Rights Department, Housing, read Oct 29, 2026
- Washington RCW 59.18.255, source of income, read Oct 29, 2026
- Oregon Revised Statutes 659A.421, read Oct 29, 2026
Questions
- Can I refuse Section 8 tenants?
- Federal law does not forbid it, but California, Washington, Oregon and other states and cities do. Check your state and city before you set a policy.
- How do I apply a 3x income rule to a voucher holder?
- In states like California and Washington, apply it to the tenant's share of the rent only. A $500 share means a $1,500 monthly income test at 3x.
- Who pays if a voucher tenant damages the unit?
- The tenant, under your lease, just like any other tenant. The voucher covers rent, not damage, so your deposit and lease terms still apply.