Searching for an apartment can feel overwhelming, especially when you come across terms like income-restricted, affordable housing, LIHTC, or HUD housing. While these programs all help make housing more affordable, they don’t all work the same way.
In this guide, we’re explaining what income-restricted housing is, the different affordable housing programs available, and common terms you may hear used to describe affordable housing.
What Is Affordable Housing?
Affordable housing is an umbrella term for housing programs that help make quality homes more accessible for individuals and families with certain incomes.
A commonly accepted guideline is that housing is considered affordable when a household spends no more than 30% of its gross income on housing expenses, including rent and certain utilities. When housing costs exceed that amount, families may have difficulty covering other everyday expenses.
Here’s where it gets confusing: Affordable housing isn’t one single program. Instead, it includes several federal, state, and local initiatives that help individuals and families access well-maintained housing at below-market rates.
Common Types of Affordable Housing
Affordable housing includes several different programs. Understanding the differences can help you determine which option best fits your needs.
Low-Income Housing Tax Credit (LIHTC)
The Low-Income Housing Tax Credit (LIHTC) program is the nation’s largest affordable housing program.
These apartment communities are privately owned and professionally managed, but they receive federal tax credits for providing affordable housing to income-qualified households. Residents must meet income limits, while rents are capped according to program guidelines rather than based on a percentage of household income.
Public Housing
Public housing communities are owned and operated by local Public Housing Authorities (PHAs) with funding from the U.S. Department of Housing and Urban Development (HUD).
Unlike LIHTC communities, rent is generally based on a percentage of a household’s adjusted income. Public housing is designed to provide affordable homes for eligible low-income families, seniors, and individuals with disabilities.
Housing Choice Vouchers (Section 8)
The Housing Choice Voucher Program, commonly known as Section 8, provides rental assistance directly to eligible households instead of to a specific apartment community.
Participants receive a voucher that can be used at participating rental communities that accept vouchers and meet program requirements. The resident typically pays a portion of the rent, while the voucher helps cover the remaining approved amount.
Because funding is limited, many housing authorities maintain waiting lists for vouchers.
HUD-Assisted Housing
Some apartment communities receive funding directly through HUD to help provide affordable housing.
These communities often receive project-based rental assistance, meaning the rental assistance is tied to the apartment itself rather than the resident. Eligible households generally pay a portion of their income toward rent while the assistance helps cover the remainder.
USDA Rural Development Housing
The U.S. Department of Agriculture (USDA) supports affordable housing opportunities in eligible rural communities through Rural Development programs.
Depending on the specific property and program, residents may qualify for affordable rents or additional rental assistance based on household income.
State and Local Affordable Housing Programs
In addition to federal programs, some states, counties, and municipalities offer their own affordable housing initiatives.
These programs may have unique income limits, eligibility requirements, or funding sources that vary by location.
What Does Income-Restricted Mean?
Income-restricted apartments are designed for households that meet specific income eligibility requirements. These income limits are established using the Area Median Income (AMI) for the local community and vary based on factors such as household size and location.
During the application process, household income is verified to determine eligibility. These programs help make quality apartment homes more accessible by ensuring housing remains affordable for qualifying individuals and families.
In most cases, when people refer to income-restricted apartments, they’re talking about communities developed through the Low-Income Housing Tax Credit (LIHTC) program. While other income-restricted housing programs exist, LIHTC is the most common type of income-restricted rental housing in the United States.
Income-Restricted vs. Income-Based Housing
These terms are often confused, but they describe two different types of affordable housing:
Income-Restricted Housing
At income-restricted communities, both income limits and maximum rents are established by the affordable housing program. As long as an applicant qualifies based on household income and other program requirements, they may lease an available apartment.
Income-Based Housing
Income-based housing calculates a household’s rent using a percentage of the household’s income, with government assistance covering the remaining approved housing cost. These programs are typically administered through HUD or local housing authorities.
What Is Subsidized Housing?
The term subsidized housing describes housing where a government program helps pay part of the rent.
Subsidized housing isn’t a separate housing program. Instead, it refers to several affordable housing programs where rental assistance helps reduce what eligible households pay each month.
Examples of subsidized housing include:
- Public Housing
- Housing Choice Vouchers (Section 8)
- Project-Based Rental Assistance
- Some USDA Rural Development communities
Income-restricted communities, such as LIHTC properties, are generally not considered subsidized housing. Instead of receiving monthly rental assistance, residents qualify by meeting income requirements and pay rents established by the program.
Eligibility
How Do I Qualify for Affordable Housing?
Each affordable housing program has its own eligibility requirements, but applicants are typically asked to provide documentation such as:
- Proof of household income
- Employment information
- Recent pay stubs or tax returns
- Household size
- Government-issued identification
- Other required verification documents
Income limits are based on the specific housing program and the location of the apartment community.
What Happens If My Income Changes?
Most affordable housing programs require residents to recertify their household income periodically.
If your income changes after moving in, the community will review your eligibility according to the requirements of the specific housing program. The outcome depends on the program guidelines, so it’s important to provide updated information when requested.
Understanding the different types of affordable housing can make your apartment search feel less overwhelming. Whether you’re exploring income-restricted apartments, public housing, or rental assistance programs, each option is designed to help qualifying households access quality housing at a more affordable cost.
Because eligibility requirements vary by program and location, it’s always a good idea to ask questions and work with a leasing professional or housing authority to determine which options you may qualify for.
If you’re facing housing challenges or need additional assistance, the U.S. Department of Housing and Urban Development (HUD) offers resources that may help. Click here to learn more.
Looking for Affordable Housing?
Foshee Residential proudly manages both affordable and conventional apartment communities throughout the Southeast. Select Foshee Residential communities participate in affordable housing programs designed to provide quality homes for qualifying households.
If you’re interested in an affordable apartment, our leasing teams are happy to explain the requirements for each community and help you determine whether you may qualify.
Explore our apartment communities today and contact a leasing office to learn more about current availability and eligibility requirements.