The search for affordable housing can be challenging, especially for individuals and households on a limited income. Rising home prices can make it hard for such groups to find suitable housing without financial assistance. In such scenarios, several people seek affordable housing that suits their budget. Fortunately, there are several public and private programs that make housing more affordable and accessible. But, it is important to consider multiple factors when looking for affordable homes.
Key considerations
1. The criteria
According to federal guidelines, a unit or property falls under affordable housing when associated costs (mortgage or rent along with utility payments) total only 30% or less of a family’s gross income. This threshold ensures one still has enough money left for basic necessities, including food and transportation.
2. Median income for affordable housing
The Area Median Income (AMI) is determined by the Housing and Urban Development (HUD) each year and for every region. The AMI is calculated based on where one lives, one’s income, and the minimum amount one can afford to pay as rent. This figure could be lower in smaller counties and higher in large ones.
3. Eligibility
People with various living circumstances may qualify for affordable housing, including individuals with low income, people with disabilities, and seniors. “Low-income” individuals are those whose earnings are less than 80 percent of the AMI. Households that earn less than 50% are considered “very-low-income,” and others earning less than 30 percent of the AMI are categorized as “extremely low income.”
Types of affordable housing
An individual could apply for various types of affordable housing based on the criteria set by relevant authorities. A few common housing options may include:
1. Section 8
This federal government program incorporates a housing voucher system for potential homeowners and renters interested in low-income apartments. Its purpose is to offer decent, safe, and clean living spaces in the private market, including single-family homes, apartments, and townhouses. The initiative is administered locally by public housing agencies (PHAs), which receive funds from the HUD. Families that receive the housing voucher must find a suitable housing unit of their choice wherein the owner agrees to rent under the program. The unit could even include the family’s current residence.
2. HOME Investment Partnerships Program
The program is a federal grant initiative administered by the HUD. Its objective is to address housing needs at the state and local levels. It allocates funds to state-level entities and local jurisdictions to support affordable housing initiatives for low-income families. The HOME Investment Partnerships Program aims to increase the availability of secure, quality, and affordable housing by fronting collaborations among local governments, nonprofit organizations, and the private sector to build housing units. The initiative supports various activities, from rental assistance to constructing new homes.
3. Public housing
The property is owned by private landlords under Section 8. The rent is set at about 30% of one’s income. One could contact all housing authorities in the area to find a relevant option, such as the local public housing agencies, who will review one’s case and determine one’s eligibility for the benefit.
4. Low-Income Housing Tax Credit Apartments (LIHTC)
Here, the government allocates tax credits to state housing agencies, who then distribute the same to developers. The developers use these credits to raise capital to construct or renovate affordable rental housing. It subsequently helps low-income families afford a safe and decent place to live and can also help free up their income for other necessities or savings. To be eligible for this housing type, an individual has to find an eligible tax-credit property and typically earn less than 60% of the Area Median Income. LIHTC housing can include various property types like cottage clusters, townhouses, hostels, and schools.
5. USDA Rural Development Housing Programs
This program is administered by the U.S. Department of Agriculture and addresses the housing requirements of individuals and families in rural areas. It helps improve the quality of life for such groups by offering affordable housing and upgraded infrastructure and promoting economic development. A property manager may use resources like Multi-Family Housing rental Assistance and Single-Family Housing Direct Home Loans to assist low-income families.
6. Section 811 Supportive Housing for Persons with Disabilities
The Section 811 program focuses on individuals with disabilities and aims to assist them with decent, safe, and affordable housing. By recognizing the unique needs of such individuals, the program offers housing along with the necessary support services. Section 811 also strives to foster independent living and community integration by providing resources like accessible units.
Ways to qualify for affordable homes
- One must get one’s proof of income because qualifying for low income is mainly about showing how much money the household makes against what the AMI of the county is. Such documentation helps determine whether the household meets income guidelines set by HUD or local housing authorities.
- After one gets their income proof verified, one can speak to local housing authorities who maintain a record of all available housing options in the area of one’s choosing. The authorities also determine the type of housing one has qualified for, such as income-restricted housing, public housing, or housing vouchers. There could be a waitlist.
- After one qualifies for affordable housing, the next step is to visit and select an option that one feels compatible with.