Housing Vouchers

Answers for Property Owners

The USDA Rural Development Voucher Demonstration Program is a rental subsidy program. Its purpose is to offer protection to 

eligible housing tenants in multi-family properties financed through Rural Development’s Section 515 Rural Rental Housing Program 

who may face hardship through the prepayment or foreclosure of the mortgage loan on the property.

Tenants may use the voucher to supplement rental payments at a former Rural Development-financed property or, if a property 

owner agrees to accept the voucher, for any non-subsidized rental unit in the United States that passes Rural Development’s 

housing-quality standards.

The voucher may not be used at rental units in subsidized housing, such as Section 8 or public housing, because its use there would 

constitute a double subsidy. 

Voucher Program Key Factors

Tenants choose to use the Rural Development Voucher – at 

either the former Rural Development property or another 

U.S. property that will accept their voucher. There is no 

requirement for tenants to use the voucher at the former 

Rural Development property.

Tenants have 10 months from the property’s pay-off or 

sale date to decide whether they want to use their Rural 

Development voucher.

Rural Development voucher payments cannot begin until 

the entire voucher placement process is completed. The 

timeframe for the placement process depends on a number 

of factors, including how responsive both the tenant and 

owner are in returning required documentation. Generally, 

the process takes between 60 and 90 days.

The steps involved in the placement process include:

• The mortgage is paid off (either prepaid or foreclosed);

• Rural Development offers vouchers to the tenant;

• The tenant accepts the voucher;

• The tenant finds a unit and so advises the agency;

• Rural Development inspects the unit; and

• Rural Development executes a contract with the 

property owner.

To be eligible for this program, tenants must:

• Reside at the property on the date of prepayment or 

foreclosure sale;

• Meet the income eligibility requirements for the program; and

• Be U.S. citizens, U.S. non-citizen nationals, or qualified aliens.

Frequently Asked Questions

Q. Is the Rural Development Voucher Program the 

same as the U.S. Department of Housing and Urban 

Development’s (HUD) program?

A. No. There are important differences between the Rural 

Development Voucher Program and HUD’s program such 

as how the voucher value is determined, in that the value 

of the Rural Development voucher will not increase and 

the Rural Development voucher amount is not calculated 

based on family income or family size.

Q. Who is eligible to receive a Rural Development voucher?

A. All tenants who are U.S. citizens, U.S. non-citizen nationals 

(people who are U.S. nationals but not U.S. citizens), or 

qualified aliens, whose income is less than 80 percent of 

the median family income and who are residing in a Rural 

Development-financed Section 515 property when the 

Section 515 mortgage is prepaid or foreclosed, are eligible 

to receive a Rural Development voucher.
Housing Vouchers

Q. How is the amount of the voucher determined?

A. When Rural Development has given approval to prepay 

the mortgage loan, a market rent study for the property 

will be conducted. The results of that study establish 

the comparable market rents for each unit type at the 

property. The value of the voucher is the difference 

between the current tenant contribution toward rent 

and the comparable market rent for the tenant’s unit.

Q. I have received approval from Rural Development 

to prepay my mortgage loan with restrictions. Are 

my tenants eligible for vouchers?

A. Yes, if they are U.S. citizens, qualify as low-income 

tenants (with household income less than 80 percent of 

median family income), and are residing at the property 

on the day of the payoff.

Q. Is the Rural Development voucher available only 

to tenants who are currently receiving Rental 

Assistance from the agency?

A. No. All low-income tenants residing at the property, 

regardless of whether they are currently receiving rental 

assistance from Rural Development, are potentially 

eligible to receive a Rural Development voucher.

Q. Will my tenants receive vouchers automatically 

after prepayment or purchase of a former 

Rural Development-financed property?

A. No. Tenants must sign and return a Voucher Obligation 

Form to USDA Rural Development, along with proof of 

citizenship or U.S. non-citizen national documentation. 

If a tenant decides not to accept a voucher or not to use 

the voucher at the former Rural Development property, 

liability for the payment of rent will continue to be 

based on the terms of the existing lease agreement 

and the prepayment approval that the tenant received 

from Rural Development. 

If a tenant chooses to use a Rural Development 

voucher at your property, both you and the tenant 

must sign a new lease, with the Tenancy Addendum 

attached, which provides for use of the voucher.

Q. When will my tenants receive vouchers?

A. Tenants will receive a voucher offer shortly after 

prepayment or foreclosure sale. Receipt of the voucher 

is dependent upon the timeliness of the tenant’s return 

of the required documentation.

Q. When will I receive payment from 

Rural Development for my tenant?

A. Voucher payments cannot begin until the entire 

process is completed and Rural Development has 

received an executed Housing Assistance Payment 

(HAP) contract between the agency and the owner. 

The timeframe for the process depends on a number 

of factors, including how responsive both the tenant 

and owner are in returning required documentation. 

Generally, the voucher placement process takes 

between 60 and 90 days.

Q. How will I receive payment on these vouchers?

A. After signing a HAP contract with Rural Development, 

owners will receive a monthly electronic payment for 

each tenant using a voucher at the property.

Q. How long will I receive payments?

A. The voucher holder’s initial benefit period is 1 year, 

subject to renewal, the tenant’s continued eligibility, 

and funding availability.
Add contact information

NOTE: Because citations and other information may be subject to change please always consult the 

program instructions listed in the section above titled “What Law Governs this Program?” You may 

also contact your local office for assistance. You will find additional forms, resources, and program 

information at www.rd.usda.gov. USDA is an equal opportunity provider, employer, and lender.

Last Updated August 2013

 Housing Vouchers

For More Information

More information is available through State and local 

offices of USDA Rural Development. Rural Development 

State offices may be contacted at (800) 670-6553, then 

press 1 and follow the prompts to be connected. Or you 

may contact the Rural Development Voucher Program at:

U.S. Department of Agriculture

Rural Development Voucher Program

1400 Independence Avenue SW

Mail Stop 0782

Washington, DC 20250

Program Aid 1872

June 2006

Revised August 2013

The U.S. Department of Agriculture (USDA) prohibits 

discrimination in all its programs and activities on the basis of 

race, color, national origin, age, disability, and where applicable, 

sex, marital status, familial status, parental status, religion, 

sexual orientation, genetic information, political beliefs, reprisal, 

or because all or part of an individual’s income is derived 

from any public assistance program. (Not all prohibited bases 

apply to all programs.) Persons with disabilities who require 

alternative means for communication of program information 

(Braille, large print, audiotape, etc.) should contact USDA’s 

TARGET Center at (202) 720-2600 (voice and TDD). To file a 

complaint of discrimination, write to USDA, Director, Office of 

Civil Rights, 1400 Independence Avenue, S.W., Washington, D.C. 

20250-9410, or call (800) 795-3272 (voice) or (202) 720-6382 (TDD).