4 Types Of Housing Subsidies For Low-Income Renters
To make it affordable for low-income households to obtain decent and safe housing, the federal government provides a variety of housing subsidies for low-income families. The subsidy can take different forms such as vouchers, direct payments, or tax credits. Check out these 4 types of housing subsidies for low-income renters below!
1. Housing Choice (Section 8) Vouchers
Housing choice vouchers, also known as Section 8 vouchers, are a type of rental assistance program provided by the US Department of Housing and Urban Development (HUD). Recipients of housing choice vouchers are responsible for finding and leasing a suitable rental unit that meets HUD-approved standards, and the program pays a portion of the rent directly to the landlord on the tenant's behalf.
2. Low Income Public Housing
Low Income Public Housing refers to a government-subsidized housing program designed to provide affordable housing to low-income families, elderly people, and individuals with disabilities. These housing units are operated by local public housing authorities across the United States and offer rental units at reduced rates to eligible low-income individuals and families. The rent is typically based on the individual's income and is usually capped at 30% of their gross earned income.
3. HUD Subsidized Project Based Section 8
HUD Subsidized Project Based Section 8 is a program funded by the U.S. Department of Housing and Urban Development (HUD). In this program, HUD provides subsidies to property owners and developers to build affordable housing units or sets aside a certain number of units in existing housing for Section 8 eligible tenants. This program is commonly referred to as "project-based" because the assistance is tied to a specific property rather than a voucher that can be used anywhere.
4. Low Income Housing Tax Credit
The Low Income Housing Tax Credit (LIHTC) is a federal tax credit offered to developers of affordable housing units for low-income families, seniors and individuals. LIHTC incentivizes developers to build housing units with rents that are affordable for low-income households by lowering the developer's tax liability over a period of 10 years. Developers who build qualifying low-income housing developments are eligible to receive tax credits based on the cost of development and the number of low-income units.
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