In an economy where the price of rent continues to rise, especially in big cities, the need for affordable rental housing has never been greater. If you’re trying to get an affordable apartment with low income, you’ve probably already experienced the challenge of finding low-income housing firsthand. The good news is that there are many complexes and apartment communities out there that provide affordable housingIn general, housing for which the occupant(s) is/are paying no more than 30 percent of his or her income for gross housing costs, including utilities. Please note that some jurisdictions may define af... More for low-income families, elderly, or developmentally delayed individuals, thanks largely to subsidies by both local and federal government agencies.
The two major housing programs that provide affordable housing for low-income households fall into these two categories — income-restricted and income-based. While these programs meet the same goal, there are some significant differences between the two. Let’s explore these three differences in a bit more detail.
1. Criteria for Property Eligibility
Income restricted apartments are typically privately-owned planned developments designed for low or middle-income renters. Local or national governments fund these developments as well as nonprofit agencies. The program is part of the U.S. Department of Housing and Urban Development’s (HUD) affordable housing initiatives. Properties that participate in the program are required to do so for thirty years or more. All of the units in an income-restricted community are designated for low-income tenants.
On the other hand, income-based apartment homes are owned by individual landlords who must meet specific criteria for offering this type of housing. For example, the landlord must renovate the property to HUD standards if it is not a new construction building. These rental units can be part of apartment complexes where twenty to forty percent of units are designated low-income. Income-based housing may also include duplexes, townhouses, or single-family homes.
2. Tenant Eligibility Requirements
There are income limits that one must meet to be eligible for income-restricted housing assistance. Specifically, to qualify for income-restricted housing, your household’s annual incomeAll amounts, monetary or not, which: • Go to, or on behalf of, the family head or spouse [or co-head] (even if temporarily absent) or to any other family member; or
• Are anticipated to be rec... More must be at least 60 percent or less than the area median income for the local area where you live.
This area median income differs widely from place to place. For example, the area median income of New York City is much higher than that of a rural community in the South or the Midwest. That means a New York City resident can technically qualify for income-restricted housing on a higher income in a more expensive area.
For an income-based apartment community, the eligibility requirements are also based on the area median income, but the threshold is lower. Your household income level must be 50 percent or less than the area’s median income to qualify for income-based housing.
3. How Rent Is Determined
Another difference between income-based and income-restricted housing is how the rent rates are calculated. For income-restricted housing, the apartment home’s monthly rent is based on a percentage of the area’s income, taking into account the going rental market rates as well as the size of the apartment itself. Rents are not allowed to exceed market values for the area, but they can fluctuate and adjust. The rental amount that is determined is the amount the tenantA legal resident of a rental property. More pays. The difference between the quoted rental rate and the market valueMarket Value is the value of the asset on the open market. More is subsidized by the government to compensate the landlord.
By contrast, rental rates for income-based housing are based not on the market valueMarket Value is the value of the asset on the open market. More, but on the resident’s income. HUD determines the monthly rent of an approved income-based apartment home by calculating 30% of the tenant’s adjusted gross income. The government subsidizes the remainder of the rent for the landlord.
What About Section 8 Housing Choice Vouchers?
Section 8The housing assistance payments program that implements Section 8 of the United States Housing Act of 1937. More housing choice vouchersA program that the federal government has for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. Since housing assis... More provide another way the government helps provide rental assistance for low-income households. However, the rule is that housing choice vouchersA program that the federal government has for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. Since housing assis... More are for use in non-subsidized rentals. Since both income-restricted and income-based housing receives government subsidies, they generally are ineligible for Section 8The housing assistance payments program that implements Section 8 of the United States Housing Act of 1937. More.
That said, since there are usually long waitlists for Section 8The housing assistance payments program that implements Section 8 of the United States Housing Act of 1937. More vouchers, you can typically get into income-based or income-restricted housing much faster and more easily. For more information, contact your local public housing authority.
Finding Affordable Housing in the Southern U.S.
If you’re looking for a low-income apartment with amazing amenities at an affordable cost, contact Olympia Management, Inc. We offer income-restricted and income-based apartment homes throughout the Southeast, all equipped with a multitude of fantastic amenities. Contact us today to find to learn more about our apartment communities.