Cities are the obvious places where subsidized housing can be found, but there are also a number of federal and state programs that help people with low incomes find affordable housing. The most common type of subsidized housing is federal housing, and there are a number of different programs available through the Department of Housing and Urban Development (HUD).
Federal Multifamily Subsidized Housing
The US government is a big player in the multifamily subsidized housing industry, as there are a lot of low-income Americans who need help paying their rent. The government provides a variety of tools to help ease this burden, including housing subsidies. These subsidies are paid directly to landlords, and they often include a rent supplement that can help low-income tenants pay a larger share of their rent. The program is available on a regional basis, with funding coming from the government and private organizations. The benefits of this program include the fact that it allows tenants to pay a lower percentage of their income for housing. In addition, once a tenant is approved, he or she does not need to reapply regularly. The program’s subsidies are typically renewed every 5 years.
The HUD website has a page that lists all the program types that are available across the country. These types of programs are administered by government agencies and include public housing, project-based Section 8, housing choice vouchers, and public housing modernization. Here are some federal multifamily housing programs:
Section 236 Multifamily Housing
Section 236 is a Section 8 program that was created to assist with the housing needs of low-income elderly and handicapped persons. It is a participant in the housing choice voucher program, which is one of the largest and most successful projects of The Housing and Urban Development Department. Under Section 236, HUD subsidizes the interest on an owner’s mortgage.
Section 236 Rental Assistance Program (RAP)
The Section 236 Rental Assistance Program (RAP) was an early form of rental subsidy that was used for up to 20% of the units in Section 236 developments prior to the Section 8 program. Under section 236, RAP was typically reserved for families earning less than 50% of the Area Median Income (AMI) who had at least one person who was a veteran or a dependent of a veteran. RAP was not actually part of the mortgage loan, but a separate contract.
Rent Supplement Program
Under the Section 8 program, the Federal government purchases the housing on behalf of the recipient. Under Section 221, the PHA only subsidizes the rent. In other words, for a given unit of Section 8, the PHA will pay the owner of the housing a flat amount on behalf of the family (usually somewhere between 25 and 30 percent of the family’s income). Under Section 221, the PHA pays the family’s rent directly to the landlord, while the family pays the PHA a small fee for the subsidy.
Bottom Line
Public housing programs are funded by the government and available to low-income families in need. The HUD website has a page that lists all the program types that are available across the country.
To know more about HUD-financed or subsidized property, attend the Compliance Prime webinar.
