My friend is on 2 open waiting lists...?

She will not qualify for the state she does not live in. They will simply refuse her, she will not get in any trouble though.

It is a federal program, but the money is divided up. She can only apply in the county she lives in and the county she works in, no random places.

I am not quite sure how or why people confuse what "local preference" means however she can apply ANYWHERE. Do not believe anyone who tells you different. The thing is most housing authoritys will have a local preference which means if you live or work in their jurisdiction your name would come up faster than that of someone who did not. If you get a voucher from a jurisdiction which you do not live or work in, ie the next state over, you must move into that jurisdiction & use the voucher their in the jurisdiction it was issued in before you can "port" or transfer it to any other jurisdiction. Section 8 is federally funded but handled at the local level, a housing authority can serve a city, a county, or even an entire state.

Im not sure if there are any penalties for this. Where I live you can only apply to the county you have been living in for at least 12 months. So I doubt she would get any out of state section 8.

She is not eligible in any county she does not live or work in. Her application in the state adjacent to hers won't get her anything.

Section 8 is run by the county.

You must reside in the county and state where you apply so she had to give someone else's address. They may or may not find out but it is fraud.