You can also get help with rent through privately owned subsidized housing. HUD low income housing initiatives extend a Low-Income Housing Tax Credit (LIHTC) to owners that provide reduced-rent units for low-income tenants. About 90 percent of affordable housing is through developer-based rental housing.
The LIHTC subsidizes more than three million rental units. In exchange, the government forgoes about eight billion in revenue annually. Property owners must offer cheap apartments for rent to receive tax incentives or government funding for investment properties. Tenants must complete income tests to be considered for the tax credit. One of the following must be true for owners to qualify for LIHTC:
- At least 20 percent of tenants have an income of 50 percent or less of area median income adjusted for family size (AMI).
- At least 40 percent of tenants have an income of 60 percent or less of AMI.
- At least 40 percent of tenants have income averaging no more than 60 percent of AMI, and no units have tenants with income greater than 80 percent of AMI.
Additionally, tenants can generally pay more than 30 percent of their household income on rent. For example, a household with a monthly income of $2,000 would not usually be expected to pay more than $600 for rent.
The federal Department of Housing and Urban Development allocates tax credits to states and sets the affordability standards. Each State housing Finance Authority awards the tax credits to developers that guarantee to investors that finance the project.
You can find low income housing through government websites. The HUD website provides a map database, so you can search for local housing options that participate in the program. You will need to apply directly to the rental landlord.
Each HUD property listing will list the address, contact information, total affordable units, and more. The listing will note what type of subsidized assistance it provides, such as housing vouchers, rent based on adjusted income, or a flat rate for the unit. Listings should also state if the buildings receive LIHTC financing.
If you are a homeowner, you can also take advantage of tax incentives. The Internal Revenue Service may allow you to deduct certain expenses from your taxable income. This means that the IRS will reduce the income amount it will tax.
Some deductible housing expenses include:
- Mortgage interest
- Home equity loan interest
- Discount points
- Property taxes
- Necessary home improvements
- Home office expenses
- Mortgage insurance
- Capital gains
Affording housing is available, whether you are a tenant or a homebuyer. You may be able to find cheap rental units without government assistance. Check out ways to reduce the monthly price on your next rental.
By Admin –
