Affordable Housing: A Primer

A primer by Rory Arnold on the Quicken Loans website outlines the sometimes squishy definitions of affordable housing and how federal, state, and local governments address housing affordability at the policy level.

The article includes the U.S. Department of Housing and Urban Development (HUD)’s definition of affordable housing — housing that costs no more than 30 percent of the household’s gross monthly income including utilities. The standard is intended to leave households with enough income for other necessities.

Affordable housing income limits, dictated by area median income (AMI), are another way government programs allocate assistance. “Affordable housing programs typically are designed to make buying a home more affordable for borrowers with limited income. Your income cannot exceed 80% of the AMI where you live in order to be eligible for many affordable housing programs.” In some cases, the high AMI in an area means that households with the lowest incomes get left out of housing assistance programs.

The article also outlines various federal loan and assistance programs aimed at homebuyers, as well as rental assistance programs such as the Housing Choice Voucher Program, and includes a checklist for finding and applying for affordable housing programs.