Summary

Establishes a HUD pilot that lets up to 25 eligible public or private housing entities hold interest-bearing escrow accounts that capture rent increases caused by a family’s earned-income gains. The pilot would cover up to 5,000 families receiving Section 8 or Section 9 assistance whose incomes are at or below 80% of area median income, with rules governing deposits, timing of withdrawals, and participation limits. The law requires HUD to pick participants within 18 months, requires accounts to be maintained for at least 5 years (up to 7 years at family option), directs HUD to study and report on outcomes within eight years, authorizes $5 million for HUD technical assistance and program evaluation for FY2026, and sunsets the pilot 10 years after enactment.

Key Points

• Creates a HUD pilot to escrow rent increases caused by earned-income gains for participating families.
• Authorizes up to 25 entities to manage accounts for up to 5,000 families with incomes ≤80% of AMI.
• Escrow deposits equal the rent increase tied to earned income and may use HUD Section 8/9 funds if offset by the higher rent.
• Families can typically access funds after stopping welfare, not earlier than 5 years (with some exceptions), and no later than 7 years.
• Participation does not require the standard Family Self-Sufficiency contract and cannot occur simultaneously with that program.
• HUD must select participants within 18 months, accounts established within 6 months of selection, and HUD must report on outcomes within 8 years.
• Pilot sunsets 10 years after enactment; $5 million authorized for HUD technical assistance and evaluation for FY2026.
• HUD may waive requirements to administer the pilot, giving the agency implementation flexibility.

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