The Family Self-Sufficiency Program
HUD's Best Kept Secret for Promoting Employment and Asset Growth

PDF of this report (53pp.)

By Barbara Sard and Jeff Lubell

Updated May 4, 2001

Executive Summary

The Family Self-Sufficiency (FSS) program is an employment and savings incentive program for low-income families that have Section 8 vouchers or live in public housing. The FSS program was enacted in 1990, based on a proposal by the first Bush Administration. It consists both of case management services that help participants pursue employment and other goals, and of escrow accounts into which the public housing agency (PHA) deposits the increased rental charges that a family pays as its earnings rise. Families that complete the program may withdraw funds from these accounts for any purpose after five years.

The FSS program provides a unique opportunity for PHAs to implement a program that directly benefits both themselves and public housing and Section 8 residents at little or no additional cost to the PHA. (The U.S. Department of Housing and Urban Development covers most program costs.) Despite the many potential advantages of the FSS program, however, it is currently underutilized. Fewer than half of PHAs offer the FSS program to residents. In addition, most agencies that do offer FSS sharply limit program size. As a result, fewer than five percent of families with children in the public housing and Section 8 voucher programs currently participate in FSS.

If PHAs expand their FSS programs and more PHAs initiate them, additional families could be assisted in becoming and remaining employed and obtaining higher-paying jobs by enhancing their skills. In addition, the higher rents that families pay as their earnings increase would be transformed into savings they could use to purchase or repair cars needed for work, buy homes, overcome financial emergencies, or for other purposes.

This paper analyzes the value of the FSS program for tenants and PHAs and offers suggestions for overcoming perceived or actual barriers to PHA implementation or expansion of the program. It also highlights how welfare agencies may advance welfare reform goals by helping PHAs expand their programs and by encouraging families that receive TANF benefits to participate in FSS.

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