Facts About Low Income Housing
Low income housing covers a variety of private and public programs which reduce the cost of housing for residents who earn income below a certain threshold. Government agencies own some low-income housing complexes. The government may also pay the owner of an existing housing complex to make rooms available for low-income residents, or provide direct financial support by providing subsidy payments to renters.
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Tax Credit Eligibility
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The owner of a low-income housing complex may be eligible for federal tax credits for providing low-income housing. To remain eligible for the tax credit, the property owner must follow rules related to accessibility of the housing complex, as well as federal regulations against discrimination. According to the Department of Housing and Urban Development, state housing finance agencies must report discrimination and accessibility issues to the Internal Revenue Service.
Tax Credit Allocation
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State housing agencies distribute the federal tax credits to owners of low-income housing complexes. According to the U.S. Treasury, the American Recovery and Reinvestment Tax Act of 2009 allows state housing agencies flexibility in allocating a portion of the federal housing subsidies the state receives. State housing agencies can provide tax credits to private landlords in the state, or they can spend the federal subsidies to construct or buy low-income apartment complexes and other buildings.
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Direct Rent Subsidies
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Some low-income housing residents receive direct rent subsidies. The Maryland Department of Housing and Community Development distributes money to local Maryland government agencies so they can send rental subsidy checks to residents. This program includes a variety of living spaces as eligible for support, including apartments, detached houses, mobile homes and even hotels if no other suitable housing is available.
Section 8
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Section 8 provides assistance to residents of low-income housing. According to the City of San Diego, the Section 8 program involves government payments to private property owners. A landlord who receives low-income housing tax credits may be required to rent to residents who are part of the Section 8 program, and will then receive the Section 8 check and the tax credit. The Section 8 program does not send a payment to the renter.
Home Buyer Assistance
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Low-income residents of an area may also be eligible for government assistance when purchasing a home. Government agencies may provide a grant that covers part of the purchase cost. According to the City of San Diego, low-income residents can also receive an additional loan from the city; this loan reduces the amount of money the resident needs to have available as a down payment. Low-income residents can receive several loans from government agencies if the resident meets the eligibility requirements.
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References
- Photo Credit inhabited complex of buildings image by Yuriy Rozanov from Fotolia.com
