As the rents continue to rise across the country without the accompanying increase in wages, it has become increasingly difficult to find affordable places to live. In some areas, even a cheap apartment can run a couple of thousand dollars easily.
Thankfully, there is help through the government for those who are working but just cannot meet the rent in their area or have to use up most of their money on rent. One such program is income-restricted apartments. So what are income-restricted apartments and how do you know if they are for you? Keep reading to learn more.
What Are Income-Restricted Apartments?
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Also known as rent-restricted apartments, income-restricted apartments are essentially affordable homes intended for singles, couples, and families with low incomes.
Generally, to get approved for income-restricted apartments, your income has to be between 30 to 80 percent of the median income level for your area. However, cities will often restrict it to 30 to 50 percent of the median income level.
The size of your family and housing history can also determine whether or not you will be considered for an income-restricted apartment.
Benefits of Income-Restricted Apartments
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1. They Are Affordable
Since the price is based on your income and the median income for your area, these apartments are quite affordable. You pay a stipulated percentage and the rest is subsidized by the government so that the landlord is properly compensated.
2. They Can Help You Get Back On Your Feet
Since you are saving money by only spending approximately a third of your income on rent, you can save up or pay off pending bills.
3. Stable Housing
Those unable to afford rent often have to move around and risk getting evicted. Having a house where the price of rent won’t increase allows you to stay in one place and have a stable home for you and your family.
4. All Tenants Are Pre-screened
While this can be a bit daunting, pre-screening is beneficial for you as well. It means your neighbors have also been background-checked for evictions, income, criminal history, and more depending on your Public Housing Authority.
5. The Apartments Are Nice
For the most part, the apartments are nice and well taken care of. Maintenance tasks such as painting and repairs are typically done after every tenant moves out.
3 Differences Between Income-Restricted and Income-Based Housing
While income-restricted housing and income-based housing may sound similar, they have a few differences.
1. Rent Is Determined Differently
In income-restricted housing, the apartment’s value is usually calculated according to the area. However, the renter only pays a fraction of this.
In income-based housing, the cost of the house is based on the renter’s income. The renter cannot pay more than 30 percent of their income towards housing.
Both these types of houses may be government-owned or private-owned buildings, and the remaining rent is subsidized by the government and paid to the landlord.
2. Not Everyone Is Eligible for Both
Usually, the capped income is different between income-based housing and income-restricted housing. For those with a very low income, income-based housing is the obvious option as the rent is capped for them based on how much they earn.
On the other hand, for income-restricted housing, your eligibility is determined based on your income, but the price of housing is not dependent on your earning. The government asks for a set amount of rent from its tenants and then supplies the rest.
Your income doesn’t come into play in determining the cost of your rent. Usually, that means that people with a higher margin of low income go for these apartments.
3. There Are Different Property Guidelines
Income-restricted apartments are designed for those closer to low or medium-income renters, so these usually include properties owned by a landlord. The rest of the rent is covered by government funding as well as non-profit agencies.
These apartments are part of the Department of Housing and Urban Development’s Affordable Housing Program (HUD). They often have to stay in the program for at least 30 years after joining. Also, all of the units are income-restricted apartments.
For income-based apartments, usually, landlords have to fit certain criteria. The apartment must fit HUD standards or be a new building. Besides apartments, single-family homes, townhomes, and duplexes may also be income-based properties.
Instead of a whole set of apartments or a community being income-based, usually 20 to 40 percent of the houses are dedicated to income-based housing.
How Much Does Income-Restricted Housing Cost?
Since income-restricted housing is based on an area’s median income, it isn’t easy to provide a specific amount for the rent for income-restricted housing.
The amount is based on the Public Housing Agency’s (PHA) rules for that area as well as the cost of a home in that area and median prices. You can either call your local PHA or go online to get an idea of the average rent for a specific area.
How to Find Income-Restricted Apartments
The best way to find income-restricted apartments is visiting the HUD website. You can fill out the application online to see if you can be approved for income-restricted apartments in your area.
With income-restricted apartments, you generally cannot pick your own home or area either, so you won’t be able to look around for apartments by yourself.
6 Tips for Renting Income-Restricted Apartments
1. Don’t Lie On The Application
All information you provide on your application will be verified. This includes your income, your housing history, criminal history, and eviction record. Lying on your application will only slow down the process and may make you ineligible for income-restricted apartments in the future.
2. Find Applications on the Department of Housing and Urban Development
Remember that income-restricted apartments are not the same as normal housing. Often, you won’t be able to go and pick out your apartment, but one will be assigned to you.
So, your first step should be to find applications online at the Housing and Urban Development website. You can also call your local Public Housing Agency to get more information.
Not only will you find the application on this website, but also other relevant information you may need such as phone numbers, general eligibility information, and how to fill out the form.
3. Contact Your Public Housing Authority for More Information
If you would like to know how much the rent would be, contact your Public Housing Authority or Agency and they can provide you with an approximate amount based on the income in the area.
This can help you determine early on if income-based or income-restricted housing is better for your needs.
4. Be Prepared to Wait
Unfortunately, like with many government programs, there is a long waitlist. So, if you require immediate housing options, this isn’t a great way to go.
Many people are waitlisted for upwards of five months. Sometimes, however, they will be able to help you find temporary housing if you are too far down on the waitlist.
If you urgently need to move or don’t think you can hold out until the end of the waitlist, mention that when you are talking to the Public Housing Authority, and they may be able to help you with temporary living arrangements.
5. Make Sure You’ve Paid Your Taxes
Your income will have to be verified before you are put on the waitlist. This is typically done by looking at your tax records for the past few years.
If you haven’t paid your taxes, you may have to wait longer to even get on the waitlist, and it will be a lot more difficult to verify, taking up much more of your time.
6. Get All of Your Documents in Order
Make sure you have essential documents like IDs, birth certificates, Social Security Numbers, and any documentation of work, visas, or eviction history.
To make the process smooth, it is best to gather everything you think you might need. It is better to be over-prepared than under to help speed up the process.
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