An Overview of Low Income Rentals

The Federal government through the U.S. Department of Housing & Urban Development (HUD) has a wide variety of low-income housing programs for all ages. All programs require income qualification. Some of this low-income housing is owned and managed by the government while other properties are owned and managed by the public sector with the support of government low-income programs.

A good resource to learn about the variety of low-income housing available is through the website of the U.S. Department of Housing & Urban Development – HUD:

Here are some commons terms used for Low-Income Housing:

About Federally Assisted Housing Programs
The U.S. Department of Housing & Urban Development – HUD has a range of programs that deal primarily with rental housing and rental assistance programs. Some of HUD’s housing developments are exclusively for the elderly and the handicapped while others are for one and two parent low-income families. The actual sponsors/developers of the housing may be non-profit or for-profit organizations, public agencies, or consumer cooperatives. To qualify, an individual’s income generally must be within certain limits.

Housing Choice Vouchers
The housing choice voucher program is the federal government’s major program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. Since housing assistance is provided on behalf of the family or individual, participants are able to find their own housing, including single-family homes, townhouses and apartments.

HUD 202
The Section 202 program helps expand the supply of affordable housing with supportive services for the elderly. It provides very low-income elderly with options that allow them to live independently but in an environment that provides support activities such as cleaning, cooking, transportation, etc. The program is similar to Supportive Housing for Persons with Disabilities (Section 811).

HUD Section 8
Section 8 is a federally funded housing subsidy program that provides low-income families the opportunity to choose and lease safe, decent and affordable privately owned rental housing by supplementing what they could afford on their own. Public Housing Authorities apply to the U.S. Department of Housing and Urban Development (HUD) for Section 8 funds, which are then provided to eligible families in accordance with HUD rules and regulations.

Low-Income Housing (Qualified)
Low-Income Housing is eligible for special tax credits that can be claimed over a 10-year period by the owner of the property. Strict rules must be followed concerning tenant qualification, certification, and project financing.

Low-Income Housing Tax Credit Properties
The Low-Income Housing Tax Credit (LIHTC) Program offers property owners and investors a credit or reduction in their tax liability that is based on the costs of development and the number of qualified low income units in a newly constructed or rehabilitated development. In exchange, the owners must offer quality units to low-income tenants at fixed below market rate rents. The lower monthly rental can be set at 30%, 40%, 50% or 60% less of the applicable Area Median Income. Tenants must meet income eligibility requirements to qualify for residency.

Market Rate Rental
The monthly rental rate for an apartment based on the local market costs and supply and demand in that geographic area for apartment rentals.

Project Based Section 8 Housing
Project Based Section 8 Housing also provides HUD-subsidized rental assistance. Eligible low-income tenants pay a percent of their gross adjusted income for rent. The rental assistance is attached to the unit so tenants cannot “take” the assistance with them if they move. Section 8 Vouchers are not accepted for project-based units; however, Vouchers may be used at other units in the development that are not part of the project-based program.

Public Housing
Government-owned housing units made available to low-income individuals and families for nominal rental rates for those who cannot afford decent housing at the market rate. These are commonly known as Public Housing Projects.

Section 202
The Section 202 program provides direct, low-interest loans to non-profit sponsors to finance the construction or rehabilitation of residential projects and related facilities for those 62 or older and the handicapped. Projects may be sponsored by private, non-profit organizations, or consumer cooperatives. Section 202 housing developments may be equipped with congregate dining facilities, and may provide an array of supportive services, including health, transportation, and referral services. Residents of nearly all Section 202 units receive Section 8 rental assistance.

Section 8
The Section 8 Housing Assistance Program was created to help very low-income persons of all ages secure decent, safe and sanitary housing in the private rental market by helping to pay a portion of the monthly rent. Income limits are determined by family size and geographic area. Participants usually pay no more than 30 percent of their adjusted monthly income for rent. The program pays the balance of the rent to the landlord. The rent must be reasonable.

Section 8 Housing Choice Voucher Program
the Housing and Community Development Act of 1974 created this program. Funds for Section 8 are provided by the U. S. Department of Housing and Urban Development – HUD. If a community is interested in utilizing Section 8, the local unit of government must adopt a resolution agreeing to administer the program in accordance with all applicable rules and regulations. The program provides financial assistance for decent, safe and sanitary housing to eligible households whose annual gross income does not exceed 50% of HUD’s median income guidelines. HUD requires 75% of all new households admitted to the program be at or below 30% of the area median income. Eligibility is based on several factors, including the household’s income, size and composition, citizenship status, assets, medical and childcare expenses. Qualified households may select the best available housing through direct negotiations with landlords to ensure accommodations that meet their needs.

Social Housing
This is a term that refers to rental housing that may be owned and managed either by the state or not-for-profit organizations, or a combination of the two, with the aim of providing affordable housing. Public Housing is therefore a subset of Social Housing.