Subsidized housing is a concept that many low-income households can benefit from, but it’s also an idea many don’t understand. You might have heard it referred to as affordable housing in the past, and that’s exactly what the concept is.
Subsidized housing is about helping low-income families afford their own homes. In this situation, the government pays an apartment owner to reduce rent totals for low-income renters. The renters will not have to spend as much on rent each month.
The goal of this program is to ensure people have a fair chance to enjoy a home they can call their own. This effort also helps people live in spaces that may be easier for them, including spots near places of work or study. There’s no need for low-income households to move outside of the city or exurbs to get lower rents thanks to subsidized housing.
However, subsidized housing isn’t available to everyone as you have to meet the necessary requirements to qualify for this program.
How Does Subsidized Housing Work?
To start, we can look at how subsidized housing works and how you’ll spend money on rent in one of these places. The Department of Housing and Urban Development, or HUD, defines subsidized housing as a form of housing where a person can spend less than 30 percent of one’s gross monthly income on rent costs. This threshold ensures a low-income household can afford to cover rent totals while still paying for food, healthcare, and other necessary expenses.
The total you’d spend on rent and utility costs will vary, but it will always be less than 30 percent of your monthly income. The management agent or the local Public Housing Authority (PHA) running your site will review your financial situation and determine your rent cost.
HUD will cover the remaining rent cost after you make your payment. The amount HUD covers is whatever falls between your contribution and the total rent that the building operator is owed.
Many affordable housing spaces are in cities and suburban areas. These spots include sites that are run by local governments, although some private apartment owners may also support these spaces.
Why Subsidized Housing Exists
You might be wondering why subsidized housing exists, as this is one more thing the government is spending money on. But this practice is much more beneficial to society than you might expect, as its advantages go beyond the people who live in these spots. Various governmental entities nationwide will promote affordable housing for many reasons:
Where Do You Go To Apply?
You can apply for affordable housing in your area by consulting your local Public Housing Authority (PHA). The HUD website provides a thorough map showing different PHAs and housing sites in other regions. This site includes info on what types of properties are available and what specific units are open, including ones with anywhere from one to four bedrooms.
You can contact the PHA or housing sites on the HUD website for info on how to qualify.
Qualifying For Affordable Housing – What Can You Do?
You can qualify for affordable housing if your gross annual income is less than 50 percent of the Area Median Income (AMI) in a local area. Some affordable housing sites will accept households with incomes less than 80 percent of the AMI, but you’re more likely to enter a plan if you’re at 50 percent or less.
HUD has information on the AMI criteria in different states, counties, and metropolitan areas. For example, the Charlotte area has an AMI of $106,000 for a four-person household. A family with four persons whose income is at 50 percent of the AMI would have an income limit of $53,000, meaning a four-person household could qualify for housing if its home income was less than that total.
The AMI will also vary based on how many people are in the household. The 50 percent income limit for a two-person household in Charlotte would be $42,400, while a six-person household would have a limit of $61,500.
How Much Is Rent At a Low-Income Housing Site?
The last point to review involves how you’ll find it more affordable to live in a subsidized housing site because of the lower rent cost, although that total will vary by location. Many local areas have limits surrounding monthly rent costs in different spaces.
The rent cost is typically determined by the household income and how many percent of the AMI it is and the size of the unit the household uses.
For example, the city of Raleigh has a limit where a household whose income is 40 percent of the AMI can pay as much as $1,101 per month for a two-bedroom property. Meanwhile, a family at 50 percent of the AMI will pay up to $1,376 per month for that same site. A four-bedroom unit in the Raleigh area would cost more, as the maximum rent is $1,419 per month at the 40 percent rate and $1,773 at 50 percent.
Conclusion
You can benefit from subsidized housing if you qualify. This affordable housing platform benefits society as it helps low-income households have stable housing. Be sure to review your income status to see if your family can qualify for this program.