HUD has now said plainly what the Consolidated Appropriations Act, 2026 changed: the long-standing special Section 8 method for counting student financial assistance is gone.

The change is easy to miss because the separate Section 8 student eligibility rule did not go away.

What changed?

Prior annual appropriations language imposed a special rule for Section 8 families when student financial assistance exceeded tuition and other required fees and charges. HUD incorporated that rule into Notice PIH 2023-27, Attachment G.16.d.

Public Law 119-75, enacted February 3, 2026, retained the Section 8 student-eligibility restrictions but omitted the separate financial-aid provision.

HUD then confirmed the practical result in its March 2026 HCV Connect newsletter: public housing and HCV families now calculate student financial assistance the same way, and programs should follow G.16.c rather than the old Section 8 instructions in G.16.d.

What does G.16.c do?

In simplified terms:

• Student financial assistance covered by section 479B of the Higher Education Act is excluded from income.
• Other student financial assistance is excluded to the extent it is needed for the student's actual covered costs after the 479B assistance is applied.
• Any remaining excess other student financial assistance is included in income.

HUD identifies actual covered costs as including items such as tuition, books, supplies, room and board, and required fees. For a student who is not the head of household, co-head, or spouse, covered costs can also include reasonable and actual housing costs while attending school and not residing in the assisted unit.

What did NOT change?

The separate Section 8 student eligibility restrictions remain in place. HUD specifically reminds HCV administrators that the student rule under 24 CFR 5.612 still applies.

So this is a change in how student financial assistance is treated as income. It is not a repeal of the Section 8 student eligibility rule.

Why this matters

Policies, worksheets, software logic, and file-review checklists that still use the old G.16.d Section 8 calculation should be reviewed.

For LIHTC properties, remember that LIHTC is not itself a HUD rental-assistance program. State allocating agencies are adopting HOTMA income rules on different timelines and may impose their own implementation instructions. Do not automatically apply an HCV implementation date to an LIHTC certification without checking the applicable state policy.

Sources

• HUD HCV Connect — March 2026
• HUD Notice PIH 2023-27
• Public Law 119-75 — Consolidated Appropriations Act, 2026