What affordable housing programs actually do

Affordable housing programs reduce what you pay for rent or help you buy a home at a lower cost. Most programs work in one of three ways: they lower your monthly rent payment, they give money toward a down payment, or they let you buy a home through a special loan. The programs that exist depend on where you live — your city, county, and state all run different ones, and some overlap.

The programs described here are free to learn about. None of them charge you to find out whether you might be a fit. If someone asks for money upfront to help you get into affordable housing, that is a scam.

Key Takeaways

  • Public Housing and Housing Choice Vouchers are federal programs run by your local housing authority; both reduce what you pay each month, though waitlists are often years long.
  • Low-Income Housing Tax Credit properties are privately owned but built with tax incentives to keep rents low; you find them by searching your city or county housing authority website.
  • Down payment help programs exist through HUD, state housing agencies, and nonprofits, and they vary widely in what they cover and who they serve.
  • Your local housing authority or 211 can tell you which programs are currently taking new people and which have closed waitlists in your area.
  • Income limits vary by program and by family size, and they differ between cities — what qualifies you in one place may not in another.

Public Housing and Housing Choice Vouchers

Public Housing and Housing Choice Vouchers are both run by your local Public Housing Authority (PHA). Public Housing means you rent an apartment or house owned by the housing authority itself. Housing Choice Vouchers (also called Section 8) mean you find a private landlord and the program pays part of your rent directly to them. In both cases, you pay a percentage of your income — usually 30 percent — and the program covers the rest, up to a limit.

Both programs have income limits based on your family size and your area's median income. A family of four in rural Mississippi might have a higher income limit than a family of four in San Francisco, because the area's median income is lower. You will need to provide proof of income, citizenship or legal residency, and background information.

The main barrier is the waitlist. Most housing authorities have stopped taking new applications because the waitlist is so long — sometimes five to ten years. Some authorities open their waitlist for a few weeks every few years. Call your local PHA directly to ask whether they are taking applications now and how long the current waitlist is. Do not rely on their website; call.

Low-Income Housing Tax Credit properties

The Low-Income Housing Tax Credit (LIHTC) is a federal tax incentive that makes it cheaper for developers to build or renovate apartments and rent them at below-market rates. These are private buildings, not government-owned, but the owner has agreed to keep rents low for a set number of years — usually 30 years. The rent is typically 50 to 60 percent of the area median income.

You find LIHTC properties by searching your city or county housing authority website, or by calling 211 and asking for a list. Some properties have their own waitlists; others take applications on a rolling basis. Income limits explore, and they vary by property and by area. You will need proof of income and a rental history or references.

LIHTC properties are scattered throughout most cities — they are not concentrated in one neighborhood. Some are new construction; others are older buildings that were renovated. The quality and amenities vary widely, just as they do in the private market.

Down payment help for homebuyers

If you want to buy rather than rent, several programs help with down payments and closing costs. The most common are run by state housing finance agencies, HUD, and nonprofits. These programs typically cover 3 to 20 percent of the purchase price, depending on the program and your income.

HUD's Community Development Block Grant program gives money to cities and counties, which then distribute it through local nonprofits or housing authorities. Your state housing finance agency (search "[your state] housing finance agency") runs its own programs, which often include down payment help, reduced-rate mortgages, or both. Nonprofits like NeighborWorks and local community development organizations also offer down payment information.

Most down payment programs require you to complete a homebuyer education course before you can receive the money. The course covers budgeting, credit, and what to expect during the home-buying process. Some programs offer the course for free; others charge a small fee. You will also need to show that you have stable income and a credit score above a certain threshold — usually 580 to 640, though this varies.

Income limits and how they work

Every affordable housing program has an income limit. If your household income is above that limit, you cannot use the program. Income limits are set as a percentage of the area median income (AMI) — usually 30, 50, 60, or 80 percent of AMI. A program that serves households at 60 percent AMI means your income cannot exceed 60 percent of what the median household in your area earns.

The same income limit means different things in different places. Sixty percent AMI in rural Kentucky is a much lower dollar amount than 60 percent AMI in Boston. Your local housing authority publishes the actual dollar limits for your area each year. You can find them on the housing authority website or by calling and asking for the current income limits.

Income includes wages, Social Security, disability payments, child support, and unemployment benefits. It does not include one-time payments like tax refunds or insurance settlements. If you are self-employed, most programs use your average income over the past two years.

How to find programs in your area

Start by calling 211 or visiting 211.org. Tell them you are looking for affordable housing programs for your income level and family size. They will give you a list of programs currently taking people in your area, the income limits for each, and the contact information. This is faster than searching online because 211 knows which waitlists are open and which are closed.

Your local housing authority is the second place to call. They run Public Housing and Housing Choice Vouchers, and they often have information about LIHTC properties and other local programs. Ask specifically whether they are taking new applications and how long the waitlist is.

Your city or county housing department (search "[your city] housing department" or "[your county] housing") may run additional programs or have a database of affordable properties. Some cities have their own down payment help programs or rent information funds.

What happens after you contact a program

Once you reach out, the program will tell you what documents you need. Expect to provide proof of income (pay stubs, tax returns, or a letter from your employer), proof of identity, proof of residency, and information about your household. If you are explore for a voucher or public housing, you will also need a background check and a credit check.

Processing times vary. Public Housing and Housing Choice Vouchers can take several months to a year after you are selected from the waitlist. LIHTC properties may take a few weeks to a few months. Down payment programs usually take four to eight weeks once you have submitted all documents and completed the homebuyer course.

If you are denied, ask why. Programs must tell you the reason. Common reasons include income above the limit, a criminal history that disqualifies you under the program's rules, or an eviction or foreclosure on your record. Some programs have more flexibility than others — if one program denies you, another might not.

Frequently Asked Questions

Do I have to be homeless to get into affordable housing?

No. Most programs serve people who are paying too much rent or cannot afford to buy, not just people without housing. Homelessness may move you up a waitlist in some programs, but it is not required.

What if my income goes up after I move into affordable housing?

It depends on the program. Public Housing and Housing Choice Vouchers usually allow your income to rise to a certain point before your rent increases. LIHTC properties have different rules — some allow income to rise indefinitely; others require you to move out if you exceed the limit. Ask the program before you move in.

Can I use a voucher or live in public housing if I have a criminal record?

It depends on the crime and how long ago it happened. Housing authorities have discretion to deny people with certain convictions, but they must consider how long ago the offense was and what you have done since. Ask your local housing authority what their policy is.

Are there programs for people who are not citizens?

Public Housing and Housing Choice Vouchers require you to be a U.S. citizen or have may be able to access immigration status. Some LIHTC properties and down payment programs have different rules — a few serve mixed-status families or non-citizens. Call 211 or your local housing authority to ask what is available for your situation.

What if I cannot find affordable housing in my area?

If waitlists are closed and rents are high, ask about emergency rental information, rapid rehousing programs, or transitional housing. These are different from permanent affordable housing but can help while you wait. Call 211 or your local housing authority to learn what exists in your area right now.