Congress has directed that preference for admission to federally assisted housing be given to households with the most acute needs, i.e., unassisted very low-income renters who pay more than half their income for rent, live in severely substandard housing or are homeless, or have been involuntarily displaced. Using the American Housing Survey and the 1990 Census, this third annual report estimates that the number of very low-income renters experiencing such needs swelled by 385,000 households, reaching about 5.3 million by 1991. The predominant problem facing these households continues to be the cost, rather than the quality of their housing. Increases in worst case needs from 1989 to 1991 disproportionately affected families with children and were greatest for families with three or more children. The elderly were least likely of all very low-income renters to have worst case needs and most likely to receive housing assistance. Despite receiving high priority for federal housing assistance, 47% of very low-income non-elderly, disabled renters faced worst case needs. Among ethnic groups, needs were highest and showed greatest increase among very low-income Hispanic renters, rising from 39% to 44% between 1989 and 1991. More than half of all renters with greatest needs were concentrated in central cities. The worst case needs were most common in the West and Northwest.