Affordable Housing: The Path To A Better Life Starts With A Place To Call Home

You have probably heard about affordable housing or HUD housing. Wondering what they are? By definition, affordable housing refers to those housing units that are affordable by that segment of the society whose household earning is below or at par with the median household income. Also known as low-income housing, affordable housing essentially addresses the needs of the lower income households. But ‘affordable’ does not mean ‘low quality’ or ‘substandard’. Let’s understand how this type of housing can fulfill your dream of having a place to call home.

What Is Affordable Housing – The Basic Criterion

In the United States, according to federal law guidelines, a unit falls under affordable housing when the housing costs (rent or mortgage plus utility payments) total only 30% or less of a household’s gross income; you should still have enough money left for necessities such as healthcare, food, and transportation.

What Is The Median Income For Affordable Housing?

Area Median Income or AMI is determined by the United States Department of Housing and Urban Development (HUD) every year for every region in the nation. Your AMI is calculated based on where you live, your income, and what bare minimum amount can you afford to pay as rent. The AMI is lower in smaller counties and higher in large ones. For example, the AMI for Los Angeles County is $80,000 and the AMI for San Francisco County is $148,600.  

Who Is Eligible For Low Income Apartments?

People with low income, people with disabilities, and seniors are eligible to seek help from the HUD to get affordable housing. A household is considered ‘low income’ if its earnings are less than 80 percent of the AMI. Those households that earn less than 50 percent are considered ‘very low income’, and the ones earning less than 30 percent of the AMI are considered ‘extremely low income’.

Types Of Affordable Housing

Section 8:

Section 8 incorporates a housing voucher system for prospective homeowners and renters looking for low-income apartments.  Those households earning 30% or less of the AMI are given priority for these vouchers and the government pays the rent for you.

Public Housing:

The main difference between Section 8 and public housing is that while the property is owned by private landlords under Section 8, public housing consists of government-owned properties.

HOPE VI:

Although a type of affordable housing, HOPE VI does not discriminate in its architecture and the houses under this scheme are meant to blend into the skyscapes of major cities. Introduced as a way to demolish, upgrade or revamp old public housing projects, HOPE VI provides homes for all income ranges.

Low-Income Housing Tax Credit Apartments (LIHTC):

Unlike HOPE VI and Section 8 where the government invests money in providing subsidies, under LIHTC, the government provides tax credits for developers undertaking affordable housing developments.

How To Apply For Affordable Housing

Let’s understand the steps to owning affordable housing apartments or houses:

Step 1:

Get your income proof in order. Qualifying for housing for low income is mainly about showing how much money your household makes v/s what is the AMI of your county. Your proof of income is the first thing that the HUD asks for.

Step 2:

Once you get the proof of income sorted, you can now approach your local housing authorities. These authorities have a record of all the available housing options in the area of your choice. They also help you with understanding whether you qualify for income restricted housing, housing vouchers, or public housing etc. You might end up on a waitlist at this step.

Step 3:

Congratulations! At this step, you have now qualified for affordable housing. You are super close to moving into a house you can fondly call home. Now, all you need to do is take a look at available affordable housing options in your area and select the one that feels most like home of your dreams. You can check with your local housing authority for the list of available options, or you can find property management companies that can help you with the search.

We at BFPM are committed to helping you with your home search. Apart from successfully managing affordable housing properties throughout Southern California, we also schedule site visits and give detailed information about a property that can help you with making a decision. To do it the right way,  check our website or talk to our consultants at BFPM.

Read our related blog here:

Tackling California’s Housing Crisis: 6 Innovative Solutions for Affordable Housing