What is the Best Type of Affordable Housing for Me?

You’re interested in an affordable home to rent but you aren’t sure what is available or whether you even qualify? You want a safe and well-maintained home but at a rent that fits your pocket.


The good news is that affordable housing exists for those who earn a low to moderate income, you just need to know what to look for and where to find it. You should also know that affordable housing doesn’t only consist of government-funded programs. It includes rentals such as micro-apartments and manufactured houses each offering unique features based on affordability and location.

In this guide, we help you find an economical rental by looking at the different types of affordable housing available in the US.

Let’s start with qualifying income for an affordable house or apartment to rent, so you can better plan your next property move.



What is a Low to Moderate Income?


Before you can find and qualify for a low-cost or economical rental, you need to know whether your earnings fall into the low or moderate-income bracket.


Someone who is considered low income earns an annual salary of 30%-50% less than the average median income (AMI) for the city or state that they live in. For example, if your city’s AMI is $70 000 then low income for the area would be considered an annual wage of $35 001.

Moderate income earners are those who earn 80%-115% of the annual median income for their city or state.


You can also visit the HUD-income limits page to learn more about qualifying salaries for particular types of housing.


The Types of Affordable Housing in the US


The US offers a wide range of low to mid-income rentals for residents, each with its own set of requirements and criteria for qualifying income. Some types of rentals you may be familiar with such as public housing or assistance programs that are government-funded while others such as mobile or tiny homes are private developments rented to singles and families who can afford the monthly rent.


Affordable housing options infographic
What are your options for affordable housing? - Infographic

Not every type of housing program is offered in every state, so getting to know your options for affordability can help you find the right type of rental for you and your loved ones.


Public Housing


Public housing is government-owned and available to those who cannot afford to spend more than 30%-50% of their income on rent. These rentals are usually very cheap but, on the downside, it’s usually located in less desirable neighborhoods.


If you live in federal public housing, you’ll pay 10% of your annual income or around 30% of your adjusted income. Utilities are usually deducted separately to rent.


Section 8


Section 8 homes are run by the HUD and private landlords. While often confused with public housing, section 8 works with a housing voucher or Section 8 voucher that a renter will give to their landlord.


There are over 2 million people including families who use Section 8 housing in the States. They also pay around 30% of their income on their monthly rent. Section 8 qualifying criteria depend on those issued by your local housing agency so if you’re interested in rent assistance with a housing voucher, contact the HUD.


Section 42


If you haven’t heard of Section 42, you may have heard of Low Income Housing Tax Credit but with this program, there is no government assistance involved. When a property is financed according to Section 42, its tenants should earn an income of 60% below the average median income for the area.


While the government has made Section 42 part of its low-cost housing initiatives, it mainly involves private developers who receive a tax credit when they make affordable housing a part of their building or housing development projects.



If you are interested in this type of housing, you will have to contact the developer or property offering Section 42. Qualifications are not performed through the HUD. It is important to understand that Section 42 housing is subject to restrictions based on credit and criminal history. You will also need to have your income recertified every year to ensure that you meet the affordability criteria for rent.


Tax credit rental developments are meant for low-income earners; however, rent increases every year are still to be expected with these rentals.


Second Chance Housing


Second Chance Housing offers the affordability and housing eligibility for those who may have a negative credit history, bankruptcy, former eviction, and other criteria that may prevent one from qualifying for a regular apartment.


man opening empty wallet
Don't let credit get in the way of renting a secure apartment

To find out how to get approved for a second chance apartment, you can speak to the team at APNM for more information.



Government & Private Affordable Housing


While the government has created initiatives aimed at helping those who live below the poverty line, there is also a consideration for those who earn an income but cannot afford the generally high costs of rent in their region.


Affordable homes and apartments are offered to those who earn a part-time or full-time salary, can afford to pay rent but cannot spend more than 30% of their income on rent.


Affordability also differs between states. What might be considered affordable by meeting the median income for the area might be much higher in another city or state.


Both government and private developers have invested in affordable housing for American communities particularly those who do earn a living and want to rent their own homes in a safe and favorable location. It is also a great option for low to moderate-income earners who want to choose their own place to rent rather than be restricted to government assistance programs.


Students raising their hands
Do you qualify for an affordable home to rent?

Low Income or Income-Based Housing


Low income or income-based housing is determined according to how much you earn per year. Whether a governmental or private development, the monthly rent will be adjusted according to your yearly income.


Sub-sectors in the Housing Market


Emergency Housing


Emergency housing is often government-supported or is made available by private or charitable organizations for communities who have been displaced by disaster, trauma, or domestic violence. It is a temporary form of residence or shelter in which residents are provided essential resources such as food, water, blankets, and clothing.


Transitional Housing


For those who are moving from an emergency house or shelter to a place of permanent residence, transitional housing is usually involved. The purpose of these types of homes is to help those who need to or want to rebuild their lives in a safe environment. People who move into transitional homes are given a couple of months to a few years to find a permanent residence.


Congregate Living


Congregate living is a type of transitional living in which rooms are rented but common areas such as the kitchen are shared. This type of housing can be temporary or permanent depending on the reason for seeking such a rental.


Congregate housing does make for more affordable living because you rent a room and share the property with the other residents. The most common type of congregate living is student housing. The downside is that you have no privacy and if you don’t get along with the rest of your housemates it makes for an uncomfortable and unpleasant living environment.


Other Types of Affordable Homes to Rent


Micro-Apartments


If you earn a full-time income, and you live as a single or couple, then a micro-house or apartment could be for you. Also known as micro-housing, residential suites, or an efficiency dwelling unit, these tiny apartments are usually part of multi-dwelling units or multiple rooms within a building. In these types of rentals, you can expect a total floor space of less than 400 square meters. Some units offer a private kitchen and bathroom while others will have you share the kitchen and open plan living spaces with fellow residents.


A similar type of residency offering economical living is the Single Resident Occupancy, but these offer private living areas with communal spaces such as the kitchen.


Manufactured Houses


A manufactured house is pre-designed, built, and best described as a home made to go! The government will designate where a manufactured house can be placed; however, it is one of the less expensive ways to own your own unit and private space. In 2020, a single manufactured home averaging 800 square feet to 1400 square feet was $57 700 as per the U.S. Census Bureau.


Mobile Homes


Mobile homes have been around for some time and certainly offer an affordable means of living. While you can find many mobile home parks and sites across the country, the problem is that any one of these sites can close down with very little notice owing to land for future property development.


Despite the closure of many mobile home parks, there are municipalities advocating to keep these sites open as it offers both single families and seniors cheap housing, preventing homelessness.


Accessory Dwelling Units


These are small living units that are located on the same lot as a single-family residence. In essence, it is a little house or rental that shares the land with a larger house.

Building these units may not be considered affordable; however,


How Do I Know Which Type of Rental is Right for My Needs?


To really answer this question, you’ll need to list the pros and cons of each type of rental, consider your annual income, and the period of time you’ll wait on getting approved for an apartment.


Section 8 is one of the hardest programs to get into. Some people have waited for over 10 years to get approved for a home to rent. Others have participated in the Section 8 lottery that is held every year in the hopes of winning their spot in a secure place to rent. Section 42 may not have you wait as long but the strict assessment criteria can make it hard to get approved.

If you are interested in affordable housing, second-chance housing can help you provided you earn a full-time income.


Public housing is another alternative, but these dwellings are government-owned and usually not in many secure or “nice” areas. You may also wait a very long time before you can be approved.


Speak to your local housing agency and find out how to qualify for specific types of rentals that you are interested in. Many of these income-limited properties may not be applicable to your situation which means that you’ll need to make another plan for renting or homeownership.


Fortunately, there are options and while it may take a little bit of time and requires some research, you can find what you are looking for.


Find the Dream sign
What are your dreams for your next home?



39 views1 comment