I'm in King County, WA and I've asked this question to various govt' and other experts before and it is clear that the expectation is that the voucher amount is subtracted from rent+utilities BEFORE applying any income to rent ratio to the balance of the applicant's obligation. In some way this makes sense because applying to total income first would imply only 1/3 (with a 3x income to rent ratio) of the voucher was for rent, when in fact 100% of it is directly paid to landlord. But it does mean applicant can qualify with potentially very little 'real' income.
Extreme example: Applicant has $3 in monthly cash income and a $1999 voucher. You are asking $1900/month + $100/month for utilities, for a total rent+utilities of $2000 for an available rental that would be covered by the voucher. You have a 3x rent to income ratio criteria.
After applying the voucher, the applicant has $1/month rent obligation and $3/month in income, so they qualify on the 3x criteria. (yes, even though it is absurd that they would be able to live and take care of the unit on $2/month)
I think you can also consider the applicant's OTHER housing expenses (not paid to you) for example an electric bill, but you must use a schedule provided by the housing authority for utility type, region,and unit size, and consider any discounts or subsidies that would be given to the applicant on it.
When qualifying an applicant, you also have to consider OTHER subsidies being received by the resident as income. For example, if they receive SNAP (food stamp) benefit or even a free cell phone service, that counts as income as well, but I believe that non-housing subsidies don't have to be counted 100% toward rent. So it is entirely possible that you could be required to accept somebody with ZERO verifiable cash income, for example being required to accept somebody who mathematically won't be able to pay all the rent (say they have $1900 sec 8 voucher on $2000 rent with 3x income ratio, and $300/mo SNAP benefit, and zero verifiable cash income) If you get that situation, contact an attorney before doing anything else)
FWIW if you have reasonably strict criteria on prior landlord reference, credit, etc. you will probably weed out most voucher holders though they are steadily passing laws restricting screening intending to make this harder to avoid. That said if the applicant DOES qualify against all your well-designed criteria after applying the income test the way they want you to, they probably aren't a much higher risk than any other new applicant and there are some benefits (Sec 8 kept paying during moratorium for example where a lot of unsubsidized lower income renters stopped).
All that said, I'm speaking from observation and questions I've asked to authorities, I've yet to have a voucher applicant even apply after I discussed qualification standards with them; and nowadays my PM handles it all.
You might want to go straight to the horses mouth and ask https://www.kcha.org/ on this, since getting it wrong may open you to a discrimination (on source of income) claim. They are always looking for more landlords to work with so they will talk to you and answer your questions.
