Terms and Definitions

Government has been involved in various attempts at providing affordable housing assistance to low-income families in the US since the collapse of the banking system in 1929 led to a national housing crisis. The Roosevelt Administration began a number of initiatives directed at stabilizing the nation's housing stock, encouraging home construction, and promoting home ownership. The first of these programs was the Federal Home Loan Bank System, which established a complex system of government support for home mortgages. That soon led to federally funded public rental housing, like Atlanta's Techwood Housing Project dedicated by Franklin Roosevelt about 60 years ago.

Project based rent subsidy programs were government's first attempt at providing affordable housing to low-income residents with mixed results. Much of the old multi-family project housing is now being phased out and torn down by HUD in favor of individual resident rent vouchers and certificates. For additional information on subsidized multi-family housing.

Public Housing: Legislation first passed during the great depression was intended primarily as jobs programs, to construct government owned public rental housing in major cities. The act was modified and expanded as the Housing Act of 1937 and provided for the establishment, through state law, of local Public Housing Authorities (PHAs) to build, own, and operate the housing.

Rural Development Rental Assistance Program:

Rural Development administers this program. Rural Development (RD) is a division of the Rural Housing Service (formerly the Farmer's Home Administration).

The Rural Rental Assistance (RA) program provides an additional source of support for households with very low incomes. The resident whose household income qualifies for assistance pays 30% of his or her adjusted income for rent and Rural Development pays the owner the difference between the tenant's contribution and the monthly rental rate.

Who is eligible? Persons with very low and low incomes, the elderly, and persons with disabilities are eligible if 30% of their adjusted monthly income is less than non-rental assistance rental rate presently being charged at the property.

Section 8 Rental Assistance:

A Section 8 rental subsidy is a federal payment to a landlord on behalf of an individual resident. In a Section 8 certificate tenancy, the household pays 30 percent of their income for rent. The difference between 30 percent of the household income and the set "fair market" rent of an apartment is paid by the federal government. Certificates have been phased out during the late 1990's in favor of Rent Vouchers.

Section 8 rent subsidies, in the form of vouchers and certificates, empowered residents to find affordable housing in the general population of their community, rather than confining them to "projects". The HUD paid program assumes that no one should be required to pay more than 30% of their household income for housing costs. For example, if a resident has income of $1000 per month, they would pay only $300 for their portion of rent and utilities; the government pays the balance directly to the landlord. The programs all differ in some ways and requirements can be fairly complex for landlords and residents.

Section 8 changes mandated by HUD affected the entire rental housing market. Congress has forced HUD to cut or change many programs to lower costs. But Congress contends that they also want to expand services to the temporarily needy, and eliminate multi-generation families who rely on public housing. Other changes in the programs deal with illegal immigration and drug use.

The Section 8 voucher program varies from the certificate program in that there is not a cap on the rent level. The resident obtains a voucher for a set amount of money based on the area, and if they are willing to pay more than 30% of their income on rent, they are free to rent a unit that exceeds the "fair market rent" figure used in the certificate program.

Qualifications: The Section 8 program can assist families, single people who are over the age of 62, and people with disabilities. A single woman who is pregnant may also apply for Section 8 housing assistance.

In addition to the overall Section 8 program, HUD also offers two special Section 8 sub-programs:
The program for homeless veterans with severe psychiatric disorders or substance abuse problems,
The Shelter Plus Care program for homeless adults with mental illness.

Income Limits: A family/individual must meet the very-low income requirements when they initially receive Section 8 housing assistance. After that, household income may exceed these limits.

Income Certification: When residents are in a subsidized program, they must certify their income once a year with their employer or the Department of Social Services. This requirement can also be a protection for the resident. If you receive Section 8 and your income goes down, your rent should be adjusted down also. You can request an income rectification mid-year from the agency you receive subsidy from and possibly get a retroactive reduction from the date your income went down.

Waiting Lists: Because of demand for the program assistance, waiting times are hard to predict, but have been as long as four years. As current participants leave the program, assistance is offered to people on the waiting list in order of their date and time of application, and according to "local preferences", or priorities established by Housing Authorities and Community Services Agencies. Despite the likelihood of a long wait, every low-income resident should apply because the program can be worth thousands of dollars a year to them. Eventually, families and households do move to the top of the list.

Until recently, the government did not require landlords to give priority to those most in need. Residents only had to meet the income eligibility requirement. This has lead to a problem where privately owned subsidized developments do not rent to the people most in need. HUD recently started requiring landlords receiving subsidies to consider the following priorities for giving people housing from the waiting lists:

Homeless through no cause of your own (i.e., landlord refuses to renew your lease, you are threatened with or subject to physical abuse);
People currently paying more than 50% of their income for rent and utilities;
Living in a home that is substandard (i.e., no toilet, plumbing or electricity).

You can ask when applying how the landlord weights the priority list.

Tax Credit Rental Program:

Congress established The Low Income Housing Tax Credit Program in 1986. The Internal Revenue Service administers the LIHTC through Section 42 of the IRS Code. The LIHTC Program provides investors with an incentive to invest (they receive credits that go towards reducing their tax liability) and results in an affordable housing program for individuals and families with low or moderate incomes.

Residents living in “tax credit” communities are provided with a newly constructed or rehabilitated rental home and they pay less than the rental rate typically charged in the area. Because the rental rates for Low Income Tax Credit Housing communities can be substantially less than the market rates in the area, applicants must be determined to be income eligible.

An applicant’s eligibility is based in part on the Area Median Income for the county in which the tax housing is located. The Area Median Incomes are established by the Department of Housing and Urban Development (HUD) and may change annually.

Determining Your Eligibility: In order to be eligible to live in a Low Income Housing Tax Credit community you must be income eligible and qualify under the Resident Selection Criteria and other program requirements. Management will assist you in making this determination.

Income Eligibility: To be income eligible, your total household income, including income from your assets, must be less than or equal to the pre-set income limit for the area (Area Median Income).

The process involves an interview with you and the other adult members (18 yrs +) of the household to determine all income sources and assets.
You will be asked to verify all income and assets, and to provide all of the necessary information to expedite this verification process (source names and addresses). This process is called “Third Party Verification.”
The Leasing Consultant will then calculate your total annual household income using the information provided by your income and asset sources to determine if you are eligible.
If your total household income is less than or equal to the pre-set Area Median Income limit, your household is income eligible.
Ask the Leasing Consultant at the specific property what other program requirements exist.

Difference from other housing programs: The LIHTC program does not provide a direct subsidy to the Resident and should not be confused with the Section 8 Rental Housing Program or other similar programs. Each Resident is responsible for the full amount of his or her rent each month. It is also important to note, that some apartment homes in the community may not be part of the program. The rent for these apartments will often be higher.

The Low Income Housing Tax Credit Program is a federal government-sponsored program. Management is responsible for determining Resident income eligibility and the process is monitored by the Michigan State Housing Development Authority (MSHDA). The LIHTC program provides affordable housing to persons within the market area. Income limits apply. For information on housing vouchers that may be accepted at a property, go to www.MSHDA.org.

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