What is Section 8 housing and how it is different than Section 42?
Both terms refer to government-based programs and are beneficial to low-income residents who make a certain income and need help paying rent.
Renters can qualify for these types of programs if their income falls within a specified range. However, due to high demand and low availability of rentals, competition may be high. It's common for apartment complexes to have long waiting lists that may be as long as one to two years.
Income-based housing means a tenant pays rent based on their income. There are many factors that are taken into account, such as family size, the apartment community and special needs.
This kind of housing was first created under the U.S. Department of Housing and Urban Development, also known as HUD. HUD's mission is to provide decent housing for all Americans and includes:
The program is mutually beneficial for both residents and landlords. Landlords receive monetary incentives to help subsidize the cost of the low-income units. These subsidies come in the form of tax credits for the first decade of their participation in the program.
Created under President Lyndon B. Johnson, Section 8 is one of the nation's largest and oldest government programs aimed at affordable housing. The program grants housing choice vouchers to those residents who qualify.
Rent for Section 8 apartments is based on 30 percent of the tenant's income. Because this is a government program, the balance is funded by the federal government. It's handled on the local level by public housing agencies.
Quick Section 8 tips:
More than 2 million low-income families participate in Section 8. Most of the families earn less than $20,000 a year and 75 percent of the vouchers are granted to those who earn 30 percent of the median income in the rental area.
For Section 8 rentals, applications are generally done on site at their local public housing or HUD office. Here's a quick rundown of what to expect if you're interested in applying:
The housing authority maintains the waiting lists for Section 8 applicants. Due to the long lists, even if you're eligible and meet the requirements, you may not get accepted.
Once you submit your application, you should confirm that you're on the list, as it may take up to a few months to even process your application. You can confirm your waiting list placement by mail or by logging on to an online portal.
Here's what to expect if you're successfully accepted with a voucher for Section 8:
Section 42 is also known as the Low-Income Housing Tax Credit and is also an income-based housing program, but it works differently than Section 8.
Unlike Section 8 rentals, Section 42 doesn't 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. It caps qualified participants' rent at a fixed amount.
It's part of the federal government's low-cost housing programs, which permits developers who build affordable housing into their projects to receive a tax credit.
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 recertification, as well, in order to remain in the unit.
Both often require other screenings for things like credit and criminal history, or even references.
Section 8 isn't to be confused with public housing. Section 8 involves private housing, while public housing is comprised of entire developments of government-sponsored dwellings.
While Section 8 determines rent for a tenant based on their income (30 percent), a public housing development bases rent on an income percentage formula developed by HUD. Public housing usually consists of those who are low income, elderly or disabled.
Discovering whether you're eligible for income-based housing programs such as Section 42 or Section 8 apartments can be a tedious process, but understanding what to do and setting the proper expectations are crucial when getting started.
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