What does affordable housing mean?
In the United States, the term affordable housing is used to describe housing, rental or owner-occupied, that is affordable no matter what one's income is. The U.S. government regards housing costs at or below 30% of one's income to be affordable.
What does subsidized housing mean?
Though it is incorrectly used to describe housing that is assisted by the government, subsidized housing is used when describing housing that has rental assistance. That is, housing where all or a portion of the occupants monthly housing cost is paid for directly by the government. An example of this is Section 8 housing vouchers, where a renter only pays the portion of the rent that is determined to be affordable to them based on their income.
I saw a property that was built with LIHTC. What is LIHTC?
Low Income Housing Tax Credits (LIHTC) is a Federal housing assistance program that provides tax incentives to owners of affordable housing. The program does not provide direct assistance to renters and is strictly used to finance the construction (not the operation) of rental properties. Usually, LIHTC properties have units available for families earning 60% or less of the Area Median Income (AMI). The rental properties are usually of very high quality and are often mistaken for luxury apartment communities. LIHTC is America's most successful affordable housing program having created millions of affordable rental units since its inception in the late 1980's.
How do I know if my income qualifies me for a given affordable apartment?
There are literally dozens of different housing programs that you might qualify for. Generally, if you earn less than 60% of the median income for your area, you can qualify for LIHTC apartments, which makes up the largest chunk of rental apartments available. To qualify for rental subsidies, where you only pay 30% of your income for rent, you'll need to earn less than 50% of the median income. Many of the programs go out of their way to target even lower income people, even as low as 30% of the median income, so make sure you ask the property manager what they have available.
What is Area Median Income (AMI)?
All government housing programs qualify recipients based on their income. Since each market area has varying living costs and income levels, the government determines an Area Median Income (AMI) for each housing market. For example, the area median income for San Francisco in 2014 is $88,500 while the median income in Dallas is $67,900.
What is Section 8?
Unfortunately, Section 8 has turned into a bad word though it's a good program that helps good people. Section 8 is a HUD program that helps renters pay their rent by paying for any rent costs that exceed 30% of the renters income. If a renter earns $2,000 per month in San Francisco but their rent costs $1,150 per month, Section 8 helps by paying $550 of that rent since 30% of the renters income is $600. This rental subsidy is very scarce and there are waiting lists across the country for the program. To find out more, contact your local housing authority.
What is a housing authority?
Housing authorities have been around for many years and was the country's first concerted effort to provide affordable housing to lower income Americans. A housing authority is usually locally based and serves a whole city or county. Some housing authorities are statewide and assist housing across the entire state. Housing authorities received funding from HUD, the Department of Housing and Urban Development, to operate Section 8 voucher programs and low rent housing called public housing. To learn more, find your area's housing authority.