You can also find privately owned subsidized housing. The U.S. Department of Housing and Urban Development (HUD) works directly with owners to provide apartments at a reduced rent through the Low-Income Housing Tax Credit (LIHTC) program, which incentives private developers to offer lower rent to families with fixed incomes.
Property owners can claim tax credits in exchange for having housing available for low-income families. These credits save the property owner taxes owed to the government. LIHTC properties account for 90 percent of the available, affordable rental housing in the country. Working with developers and other organizations, the LIHTC program is the main way that the government promotes the building and renovation of low-income housing units. The federal government provides funding to states, which then offer the funds to developers.
LIHTC properties can be apartment complexes, townhouses, single-family dwellings, and duplexes.
Owners must follow one of the following income tests to participate in the LIHTC program:
- At least 20 percent of tenants have an income of 50 percent or less of area median income adjusted for family size (AMI).
- At least 40 percent of tenants have an income of 60 percent or less of AMI.
- At least 40 percent of tenants have income averaging no more than 60 percent of AMI, and no units have tenants with income greater than 80 percent of AMI.
Likewise, tenants’ rental costs cannot exceed 30 percent of their income. Unlike Public Housing and the Housing Choice Voucher Program, HUD does not make income adjustments, such as child care and medical expenses, when determining eligibility.
Local agencies receive about $8 billion each year in order to provide tax credits, which help to create new low-income housing opportunities. Both for-profit and non-profit organizations can receive these tax credits if they build or rehabilitate existing housing to serve as low income housing units. Each year, an average of nearly 1,400 building projects and over 106,000 new low-income units have come out of this program. Organizations must apply for funding through the state’s housing authority. Developers are encouraged to build in Difficult Development Areas (DDA).
If you earn too much to qualify for government assistance or programs like Section 8 or public housing, you can still find affordable housing options. You can try several options when looking for low rental costs, such as finding a roommate or reducing your utilities. Click on to the next slide in order to learn more about other options for affordable living units.