Over 30 years ago—in a previous political era—debates about welfare policy were preoccupied by claims of excessive dependency and standards of consumption. One side argued that government support was too generous and undermined people’s drive to work, while the other side believed poverty could be addressed with a more generous and effective targeting of resources. The search for an alternative approach was the impetus behind the Family Self-Sufficiency (FSS) Program, which was designed to offer a financial reward to families receiving federal rental assistance when they increased their employment earnings. In 2012, HUD commissioned a national impact evaluation of the program. Although the final report failed to find increased earnings for participants relative to a comparison group, a fuller consideration of the study and other developments in the field offer a more accurate and detailed reflection of the program’s potential. After the evaluation was underway, Congress revised program parameters and HUD significantly amended program rules to streamline administration and improve outcomes.
Unfortunately, the Trump administration has cited the evaluation to argue for alternatives to the FSS Program (such as work requirements and time limits). In 2025, the administration moved to shut down the program as part of a proposal to de-fund federal housing assistance in favor of a block grant to states. In supporting this plan, HUD leadership is undermining many of its own programs and partners. The agency seems set on abandoning a program that garnered rare bipartisan support and ignoring a growing field of practice that is already producing impressive results. Instead of scrapping FSS in a political maneuver, HUD should be looking for ways to strengthen the program. By amplifying and replicating strategies that have been proven to work, FSS can help transform the experience of receiving rental assistance so it becomes a more effective means for supporting aspiring families.
How FSS Works
Most families receiving federal rental assistance face a tough dilemma: since their rents are typically calculated as a percentage of income, earning more means they must pay more in rent. This can feel like a tax on working has been baked into the rules. As a result, a program intended to help by providing lower rents than those available on the market can make it harder for families to improve their financial circumstances.
The FSS Program flips this script. Participants in the program who are able to raise their earnings can divert the amount their rent would usually increase into an escrow savings account. Families can then access accumulated funds by achieving program goals, including being employed and free of “welfare assistance.” While enrolled, the program connects families with support services to help them succeed.
The FSS program isn’t the only effort to reduce financial downsides of increasing household incomes for families receiving rental assistance. Under the Jobs Plus program, participating housing authorities allow families to set aside higher earnings, which are then disregarded in rent calculations. As of 2020, HUD has also allowed housing providers to extend the period before they must verify residents’ incomes, which can delay future rent increases. But FSS is the primary federal program that enables housing-assisted families to build savings in their own name while paying rent. When a family graduates from FSS with money in their escrow savings account, they gain access to a flexible and potentially valuable financial asset. The amounts in these accounts vary, but according to HUD data the average savings for graduates with escrow almost reaches $10,000. Program rules allow these resources to be used at a family’s discretion, including as a downpayment on a house or a security deposit for a new market-rate home.
Like many novel programs, FSS took a few years to gain momentum. Initially, only public housing authorities could offer the program to residents in public housing or those receiving housing vouchers, and the limited funding available was used to cover the salaries of FSS program coordinators. When annual funding eventually rose to $75 million in 2011, it enabled staff to support about 57,000 FSS-enrolled families across the country. Meanwhile, the program continued to attract champions on both sides of the political aisle, who led a charge to expand it and steadily increase funding. (Last year, funding reached $141 million, and this year appropriations were further increased to $156 million.) The 2025 President’s Budget request of $125 million for FSS was projected to enroll at least 74,000 families receiving rental assistance. Although this may seem modest compared to the five million households eligible for support, the FSS Program is poised to continue to grow and reach more families.
Research Efforts Drive FSS Reforms and Reflect the Program’s Potential
In 2012—before this expansion occurred—HUD commissioned MDRC, a social policy research organization, to conduct an evaluation of FSS’s implementation and impacts. The 2023 publication of the final report prompted a special issue of Cityscape—HUD’s journal on housing and community development issues—in 2025, which invited researchers to review and assess both the findings of the evaluation study and the broader cumulative experience of FSS in the field.
The release of the FSS Cityscape issue this past fall was a significant and poignant milestone for the program. Although the MDRC study found no evidence of higher earnings among FSS participants compared to the control group, it was able to identify in a series of interim reports a number of concrete ways the program could improve its performance. Many of these were echoed by other stakeholders and became the basis for new congressional legislation enacted in 2018. One of the most impactful changes was extending FSS eligibility to families receiving project-based rental assistance, making another 1.2 million households eligible to participate. It was not until 2022 that HUD finalized a new set of program rules, accompanied by a guidebook, updated training materials, and additional technical assistance opportunities for program providers.
[RELATED ARTICLE: The FSS Program Was Expanded Beyond Public Housing Authorities—Here’s How It’s Going]
Increased support from Congress and the release of new program rules has prompted a reset for the program. Most experts agree that the version of the program currently operating is this revised one, not the one scrutinized by MDRC. Cityscape’s articles capture this dynamic and provide insight for anyone interested in following current debates about FSS. This includes the acknowledgement that some programs produce much better outcomes than others—and highlights a growing set of best practices that can be elevated by and shared among practitioners in the field.
HUD’s Leadership Message Misses the Mark
Unfortunately, there is mounting evidence that engaging in good-faith discourse—a bedrock of constructive program evaluation—is being undermined by the current administration. A “leadership message” introducing the FSS articles in Cityscape written by John Gibbs, the political appointee assigned to HUD’s Office of Policy Development and Research, mischaracterizes the findings of the multiyear evaluation and parrots a series of talking points about work requirements, time limits, and state rental assistance block grants. As an introductory text for the special issue, it is a short and jarring read, and not a helpful—or informed—preamble to any of the issues at hand.
Unlike other assistance programs, FSS already has time limits built into its rules. (Enrollment is capped at five years, with a possible two-year extension under certain circumstances.) While participants are not required to leave their housing, they must graduate or exit the program once their time runs out. The irony of the current administration’s emphasis on work requirements is that most FSS participants are already working when they enroll in the program. And the point of the program is to offer a financial incentive to encourage work for those who can, enabling them to earn more and support their climb up the economic ladder so they can afford housing independently.
Beyond the administration’s attacks on the existing social safety net and threats to withhold funds from states and localities run by political opponents, it is difficult to take a leadership message promoting self-sufficiency at face value when it dismisses the very programs that align with its stated policy goals. If HUD’s current leadership cared about governing, they would have paid more attention to the details in the Cityscape articles. Here’s a summary of what they would have found.
Making Sense of the National Evaluation
Setting aside the administration’s posturing, the MDRC’s FSS evaluation is a good place to start considering program performance. The evaluation used a randomized controlled trial (RCT) and tracked the experiences of 18 public housing agencies with the FSS Program. Often called the gold standard in program evaluation, RCT sets a high bar for “successful” performance, especially when diverse programs are combined, which can dilute the impacts of high-performing programs. Distinguishing between a control and treatment group works well in a lab but is more challenging in real life. While the sites included in the study varied in size and other characteristics—intended to best isolate “program effects”—there was no consideration of program quality within the treatment group. The overall sample likely included both higher and lower performing programs but obscured how to tell them apart. Given the mix of public housing agencies included, many engaged practitioners were not surprised that this study did not demonstrate “success” through statistically significant increases in employment and earnings. In many respects, FSS was still in its start-up phase and wasn’t ready for its close-up.
This wasn’t the fault of the evaluation team. But it was somewhat of a tragedy that so many resources went toward evaluating a program that had already been significantly changed, making some of the findings obsolete—or at least less relevant. Launching new programs with large, diverse public housing authorities (PHAs) across the country is already a difficult task. Many PHAs initially felt as if FSS had been imposed on them, as they were required to offer it despite receiving limited support to administer it. There was certainly no uniform approach regarding the services provided and staff caseloads. This variation, combined with the “light touch” of FSS, should have tempered expectations about the program’s results across the entire population of FSS participants.
While the final report didn’t find observable impacts on earnings for FSS participants across the treatment group, many families were able to increase their incomes, divert what they would otherwise have paid in rent increases, and eventually access their savings. This is reflected in the amounts that successful FSS graduates can and have accumulated in their accounts. Families that are able to gain access to their escrowed savings can be seen as benefitting from the program, perhaps even significantly. However, the MDRC study wasn’t all or nothing. It reported several other positive impacts for FSS-enrolled families, including increased participation in employment-related services (especially educational programs), financial counseling, and homeownership education, along with shifts from part-time to full-time employment.
Model Programs and a Coalescing Field of Practice are Emerging
The special Cityscape issue benefited from taking a wider view of FSS. The broader group of researchers was able to collectively examine how a distinct field of practice is emerging—with stakeholders that include more innovative public housing authorities, multifamily affordable housing providers, and partner organizations that offer support services. More importantly, there is a growing awareness of best practices that improve performance and that can be replicated.
One key organizational driver of this dynamic is a nonprofit called Compass Working Capital (Compass), which collaborates with affordable housing providers to implement a client-focused model for FSS. This model features culturally relevant coaching designed to strengthen financial management practices, an emphasis on asset building, and access to additional services tailored to FSS families. Compass also collects verifiable data in order to monitor results and improve program performance. Their results have generally exceeded the outcomes of more traditional programs and reflect the potential to get more out of the FSS Program.
Between 2010 and 2024, Compass was the FSS administrator for more than 5,000 households receiving federal rental assistance and these families had accumulated more than $19 million in escrow savings. More specifically, according to a report I co-authored for Cityscape, Compass-run FSS programs graduate three out of every four enrolled families that remain in subsidized housing— a graduation rate about three times that of the national average for all HUD FSS programs. Families don’t just graduate; they also have more savings when they do. Compass data reveal that 90 percent of graduates in their programs have accumulated savings in their escrow account when they graduate from the program, far exceeding the 23 percent of overall FSS graduates who have escrow savings, according to HUD’s 2022 data. Additionally, many Compass FSS graduates eventually raise their credit scores. This becomes a real advantage if they go on to buy a home, which 16 percent of Compass graduates have gone on to do. In comparison, 8 percent of FSS program graduates became homeowners in 2022— a good outcome for this population, but the Compass results are significantly higher.
Besides offering its own financial coaching model, Compass has taken on a strategic role as a convener of the field, providing training materials for frontline staff, overseeing a national network of FSS practitioners, and delivering technical assistance to other housing groups aiming to launch programs. In 2019, Compass created FSS Link, an online learning platform that includes program materials, webinars, and discussion boards. Over 2,400 practitioners are now members.
The growing engagement of organizations and practitioners with FSS has elevated a set of insights that I believe are unifying the FSS field, and also informing policy efforts. For starters, there’s widespread recognition that it is exceedingly difficult to maintain a job—never mind a high credit score—without a place to call home. Stable housing provides an opportunity for financial stability. Failing to offer families that receive rental assistance resources to help raise their incomes and better manage their finances is a missed opportunity. Services designed to help participants overcome barriers to work, such as childcare and transportation, are particularly valuable. Not everyone can increase their earnings—a precondition for building escrow savings in most FSS programs. Since most participants are already employed when they enroll in FSS, increasing their incomes may require additional training and education. The key is maintaining engagement with participants so they can graduate from the program. Instead of trying to identify who is likely to succeed early on, the challenge is to make the opportunity available to rental assistance recipients and to do so over a longer period.
Rules for FSS programs permit flexibility and discretion in the services provided to participants. As a result, there is significant diversity in program structure. Policymakers should support and incentivize high-quality programs through investments in training, technical assistance, and other field-building activities, and provide opportunities for additional grant funds to encourage innovation and high performance. Compass’s model is a good example: it provides participants with personal financial coaching instead of referring them to external support services. Surveys of Compass program participants have embraced healthier financial practices—decreased use of check cashers and increased avoidance of overdraft fees—that can lead to better financial outcomes in the long term.
FSS Can Become a More Powerful Tool
Expanding the FSS field depends on monitoring program implementation and learning from research and evaluation efforts. There’s more to learn about how to make the program more effective, and future research should look beyond earnings to include other socioeconomic and family outcomes. Financial health metrics, such as credit scores and debt levels, are not currently measured, but they can significantly impact the financial health of families receiving assistance.
Organizations in the field must collect their own information on program performance and participant outcomes to identify replicable best practices. Additionally, we need to track the experiences of multifamily housing providers—whether nonprofit or for-profit—that are new to the program. Not only are the dynamics of these organizations distinct from those of public housing authorities, but they also have the most potential to expand FSS in the years ahead.
We can also test different methods of program delivery, such as automatic enrollment. If families were included in the program by default, they could benefit from the financial incentive of an FSS escrow account regardless of any additional services they access. Employer-sponsored retirement plans have used auto-enrollment to boost participation while lowering administrative costs. Similarly, FSS providers could shift their focus—and program costs—from labor-intensive activities like recruitment and enrollment to providing potentially more impactful support services. In 2025, Sens. Reed (D-RI) and Britt (R-AL) introduced the Helping More Families Save Act, which would establish a multi-site, opt-out FSS program serving up to 5,000 HUD-assisted households. Reflecting bipartisan support, this initiative would offer an opportunity to learn how families respond if FSS features are seamlessly integrated into rental assistance experience.
As the FSS field evolves, there are real opportunities for improvement, including streamlining recruitment, reducing unnecessary early exits that hurt retention rates, and supporting participants so they can graduate and access the funds in their escrow accounts. Achieving these goals will require collaborating with HUD, congressional policymakers, and local housing providers.
The current administration’s chaotic budgeting—reflected in the use of rescissions to undercut congressionally authorized spending and upend affordable housing options for those at risk of homelessness—creates uncertainty. This will cause many organizations to hesitate before pursuing strategies to launch or expand federally supported programs.
In May 2025, the administration released its budget proposal for HUD and other federal agencies, which called for eliminating FSS and other programs in an effort to replace all federal rental assistance programs with a large block grant to states. Although the idea did not gain traction in Congress, it signaled the administration’s weak support for FSS specifically and housing assistance generally. Regardless of the administration’s posturing, I expect that Congress will continue to fund and support FSS. The Senate Committee in charge of HUD appropriations stated directly in its report language that it “strongly supports the FSS program” and backed this up by increasing annual funding to $156 million for the current fiscal year, which was approved as part of the recently passed HUD appropriation.
Yet recent federal policy changes pursued by the new administration have curtailed other services that are particularly valuable to lower-income families, making it harder for affordable housing providers to support their residents. Moreso, attacks by the administration on federal employees and a general undermining of expertise do not bode well for creating effective public programs informed by policy assessments. It is more likely to foster a political climate that will weaken the federal government’s ability to oversee projects in the field, including those led by HUD.
The increasing importance of affordability concerns could lead to a renewed focus on rental assistance programs and should support proposals to expand available subsidies for both low-income renters and those building affordable housing. But we should expect more. Receiving rental assistance should align with a family’s aspirations to improve their financial circumstances. Traditional approaches fail to overcome the many barriers to work that lower-income families face and hinder the very activities that could lead to higher earnings. An alternative approach—with a growing track record of success in model programs—allows families to keep more of their earned income. If federal policy truly aims to encourage families receiving housing subsidies to work, earn, and save for the future, then FSS provides a framework for successful intervention models to build on.
About the Author
Tags
Comments
2 thoughts on “The Results of a HUD Study Don’t Tell the Full Story of a Program That Helps Families Save”
Leave a Reply
This site uses Akismet to reduce spam. Learn how your comment data is processed.
Thank you Reid and Shelterforce for this important information and argument in favor of expanding FSS!
I would love to see FSS become mandatory for families who are able to work. When you can help families achieve financial independence it helps break the cycle of generational poverty. Sometimes the only thing that a family needs is someone who can lead them through things they do not understand. Most families who grew up in poverty did not have the chance for their families to teach them about balancing a check book or building their credit. Their families were too busy trying to survive. Kids in these situations build resilience. Resilience does not lead to understanding sadly. A person who has gone through a similar situation can be a family’s best resource. FSS is an amazing program that can lead families to living better lives.