I would ask your attorney and talk to your PHA about it.
Some of it may depend on the nature of the lawsuit, when you originally got your voucher (pre-HOTMA or post-HOTMA, and if your PHA is doing any grandfathering), and how much the settlement was for.
Here is some guidance from source:
"Any lump sum additions to a family’s assets are not to be included as income. Examples include lottery winnings, civil action recoveries, inheritances and insurance payouts (including those from personal property loss).
The rule clarifies that civil rights settlements or judgments, whether resolutions are structured settlements or lump-sum payments, do not count toward a family’s income. This exclusion includes funds from litigation or other actions, such as conciliation agreements, voluntary compliance agreements, consent orders, other forms of settlement agreements, or administrative or judicial orders under:
the Fair Housing Act;
Title VI of the Civil Rights Act;
Section 504 of the Rehabilitation Act (Section 504);
The Americans with Disabilities Act; or
"Example F4: Civil Rights Settlements Background: A civil rights settlement, regardless of how the settlement is paid (lump sum or several distributions), is excluded from annual income; however, the amounts would be considered part of net family assets if held in a savings account, revocable trust, or in some other asset that is not excluded from the definition of net family assets.
Scenario: Jessica receives a civil rights settlement in the amount of $20,000, because she was not provided a reasonable accommodation. Jessica deposits the $20,000 into her savings account, which already contains $5,000, and earns 0.5 percent interest annually. Total civil rights settlement received: $20,000 (excluded from income under § 5.609(b)(25))Value of savings account: $25,000 (which includes the $20,000 settlement) Actual income earned from savings account: $25,000 x 0.005 = $125 included in annual income
Result: In this example, the family’s income reexamination will not include the amount received from the civil rights settlement, because the funds are not considered income under § 5.609(b)(25). However, the value of the savings account where the settlement was deposited will be used in the calculation of net family assets, and the actual income earned from interest accrual (as self-certified by the family) will be included in the family’s annual income."
