A.D. Thompson

Just as this post was in progress, an alert flew across the screen about rising interest rates – a factor that often boosts the online searches for income-based housing.

Why? Rising interest rates mean getting a mortgage becomes more challenging for many people, which means rents tend to rise. Combine that with the current flat-salary trend and it’s a recipe for a super-tight rental market.

Government-based programs, like Section 8 and Section 42, can help – but eligibility is a must.

And what are the differences? Read on for a quick tutorial.

Section 8 Apartments

Section 8 (so named as it is, literally, Section 8 of the Housing Act of 1937) is one of the nation’s largest and oldest government programs aimed at affordable housing. Simply put, the rent for Section 8 apartments is based on 30 percent of the tenant’s income. The balance is funded by the federal government via a Housing Choice Voucher, which is handled locally by public housing agencies.

If you’re interested in applying or learning more about this program, contact your local public housing agency and HUD office, which you can find here.


Section 42 Housing

This income-based housing program is a little different. Section 42, sometimes known as a “low-income housing tax credit,” is part of the IRS tax code, a program that permits developers who built affordable housing into their projects to receive a tax credit. Unlike Section 8 rentals, Section 42 does not provide tenants with government assistance. Properties financed under Section 42 are required to house a percentage of residents earning less than 60 percent of the area’s median income, capping qualified participants’ rent at a fixed amount.

How do I apply and will I qualify?

For Section 8 rentals, applications are generally done on site at their local public housing or HUD office. This will require personal and income-related information. Restrictions and requirements vary depending on where you live; agencies reviewing your application will pore over your finances, from basic income to inheritance, alimony to scholarships. All information will need to be verified. The paperwork will continue in subsequent years come lease-renewal time.

Applications for Section 42 are typically done at the selected property’s office. Eligibility to live at a Section 42 property is based on income and/or student status. Some properties require households to have a minimum income based on the rent (for example, if the rent is $1,000 a month, the household income might need to be $3,000) – this will likely require annual re-certification, as well, in order to remain in the unit.

Both often require other screenings for things like credit and criminal history, or even references.

Discovering whether you are eligible for income-based housing programs such as Section 42 or Section 8 apartments can be a tedious process, but most applicants find the paperwork well worth it.



About The Author

A.D. Thompson

A.D. Thompson spent the first half of her 25-year career behind the editor’s desk, including time at Playgirl Magazine. Her work has appeared in The New York Times, The Orlando Sentinel and a host of other publications, print and online. Now a full-time freelancer, she is the Orlando expert for USA Today’s 10Best.com and writes about everything from Mickey Mouse to marijuana-based tourism with equal levels of enthusiasm – and occasional bouts of the munchies.