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FREQUENTLY ASKED QUESTIONS about Affordable Housing

What is Tax Credit Housing?
Properties operating under the Low Income Housing Tax Credit (LIHTC) program offer affordable housing to low and moderate income applicants. The program is regulated by an agency in each state.

I have heard about Section 42 housing. What type of program is that?
This is another way of referring to the Low Income Housing Tax Credit program (LIHTC), so called in reference to the Section 42 of the Tax Reform Act of 1986. This law created incentives for building owners to offer more housing opportunities to those with moderate incomes.

How do I qualify for tax credit housing?
You will be asked to provide verification of your current income and assets from all sources. If the total household income is below the property’s income limit(s), the application has passed the first test for eligibility. Income limits are determined annually by the Department of Housing and Urban Development (HUD). For information on current tax credit income limits for your area, go to the HUD website at www.huduser.org/portal/datasets/mtsp.html.

Are there further steps in the application process?
Federal regulations also require that we complete a credit report, a criminal background check and landlord verification (if applicable).

How will my lease be renewed after the first year?
We must re-verify all sources of income and all assets prior to the expiration of the first year lease to determine continued eligibility. The property may raise your rent in the renewal.

How does the Tax Credit program differ from Section 8 or the housing choice voucher program?
Unlike the HUD Section 8 programs, the LIHTC program does not offer assistance in the payment of rent. In other words, there is no direct rental “subsidy” in tax credit housing. An indirect subsidy is provided to the developer who agrees to keep rents at approved levels.

What exactly is the HUD Section 8 program, then?
The Section 8 housing program was established by HUD in 1974 and provides affordable housing to low and very low income applicants. In this program, resident rent is based upon the resident’s income, assets and (for the elderly/disabled) eligible medical expenses. You are required to re-verify income, assets and expenses each year and rent will be adjusted accordingly.

How do I qualify for Section 8 housing?
Because demand for subsidized housing far outstrips supply, you may be placed on a waiting list if we determine that you qualify based on annual income. Income at move-in must be below the applicable income limits for the area as determined annually by HUD. For more information on area Section 8 income limits, go to the HUD website at www.huduser.org/portal/datasets/il.html.

When a unit becomes available, income and assets will be subject to final verification. For applicants 62 years of age and older as well as non-elderly disabled applicants, certain eligible medical expenses may reduce the adjusted annual income.

Finally, a credit report and criminal background check along with landlord verification will be processed.

Waiting Lists
Each Section 8 property maintains a separate waiting list; if you are interested in submitting a pre-application, please contact the property you are interested in directly. Note that the length of the waiting list(s) varies from location to location depending on the number of residents moving out as well as seasonal factors.

When a unit becomes available, income and assets will be subject to final verification. For applicants 62 years of age and older as well as non-elderly disabled applicants, certain eligible medical expenses may reduce the adjusted annual income.

Finally, a credit report and criminal background check along with landlord verification will be processed.

How is my rent determined in Section 8 housing?
Generally the tenant portion of the rent is 30% of the adjusted monthly income. This amount is further reduced if you are to pay some of your own utilities, such as electricity.

Is a security deposit required at move-in?
HUD regulations require that we collect security deposits from all Section 8 residents at move-in. The amount is equal to 30% of your adjusted income and will not change after the first year.

Will my rent change after move in?
Each year, you will be required to re-certify your income, assets and (if applicable) medical expenses. Your rent will be adjusted to reflect any changes that have occurred.

Since Section 8 as well as Tax Credit properties may have additional requirements such as age restrictions and occupancy limits, inquire at the site for specific information.