Affordable housing can leave a lot of people confused and the topic brings about a lot of questions that people have. Finding the answers to these common questions can make finding affordable housing a little easier.
What Is Affordable Housing?
Affordable housing in the USA is defined as housing that is affordable for different incomes. The U.S. government says that housing costs that are at or below 30% of someone’s income is affordable.
What Is Subsidized Housing?
Many times subsidized housing is used in place of government assisted housing. This is incorrect and the term is actually used to describe anytime there is rental assistance. An example of subsidized housing would be Section 8 housing. This is where renters only pay a portion of the rent, a figure that is decided to be affordable based on income.
What Does LIHTC Mean?
LIHTC is also known as low-income housing tax credits. This federal program gives tax incentives to those who own affordable housing. It doesn’t provide any direct assistance to renters and is used to help finance construction of affordable rentals. Usually these types of properties will have units that are available for families that earn 60% or less of the median income for the area. Just because these units are affordable doesn’t mean they look it. Oftentimes these rentals are mistaken for luxurious apartments. This program is the country’s must successful for affordable housing and has created many affordable options for rentals since it began in the 1980s.
What Is Section 8?
Section 8 has gotten a bad connotation, but it should not. It’s actually a good program that has helped a number of people. This is a program created by the Housing and Urban Development (HUD) department and helps renters pay their rent when rent costs exceed 30% of their income. Unfortunately, this rental subsidy is scarce and there are waiting lists for people across the country to get into Section 8 housing.
What Is Area Median Income (AMI)?
Since affordable housing options are based on income, it’s important to understand the area median income (AMI). Each market has different income levels and living costs. The government will determine the area median income. Areas with higher living costs will have higher AMI, such as San Francisco.
Does My Income Qualify for Affordable Housing?
There are a number of different programs you can qualify for when it comes to affordable housing. If you earn 60% or less of the median income, you may be able to qualify for LIHTC housing, which does make up a huge chunk of rentals that are available. If you want to qualify for where you pay 30% of your income in housing, then you need to earn less than 50% of the median income. Programs usually target the lowest income level of people, even those who are earning less than these standards, so be sure to ask the manager of the property what is available in terms of affordable housing assistance.
How Do You Qualify for Affordable Housing?
Since there are so many different affordable housing options, there are different qualifications for each one. Qualifications will be based on income, but some can be based on family size and immigration status. You can check with different properties for qualifications.
What Are Housing Authorities?
Housing authority agencies have been in existence for a while and it was the United States’ first attempt to provide housing that is affordable. There are different housing authorities and they are usually locally based, but they can also serve a whole county. Some are statewide and will help with housing throughout the entire state. Housing authorities get their funding from the HUD.