What is Affordable Housing?

Affordable housing is a growing challenge for most communities, as property values, real estate prices and rental rates continue to rise tremendously. The term affordable housing refers to both rental apartment units and starter homes for low- and moderate-income renters and homebuyers.

Because median income, median home prices and median rental rates vary by region (and even by neighborhoods), affordable housing can be difficult to quantify. However, the rule used by many affordable housing advocates is that affordable housing cost no more than 30% of the median income in a specific region or metropolitan area.

Unfortunately, even this amount can be too high for very low-income Americans.

To make housing more affordable for Americans with low income, the federal government, in conjunction with state and local authorities, provide public housing and subsidies for low-income tenants, such as the Section 8 Program, now called the Housing Choice Voucher Program. Some municipalities have also passed ordinances that require new residential  property developments to set aside a percentage of the units in the projects for low-income or affordable housing.

For would-be homeowners, various federal and local programs also exist to help homebuyers, especially first-time homebuyers, obtain affordable housing.

For starters, homebuyers are able to deduct the interest on the mortgage loan they used for the purchase of their home. First-time homebuyers may also receive tax credits and down payment assistance, as well as easier mortgage loan terms through FHA loans.

But all these programs don’t address the issue of price — which is the biggest factor affecting affordability for homebuyers. The typical pattern for beginning homeowners in America is to begin with an affordable starter home and then move on to larger or more expensive homes as their income increases. Today, condominiums have become the starter home of choice for many first-time homebuyers.

For more information, see also the following entries:

• :Apartment:
• :Condominium:
• eductions:
• own Payment:
• :Interest:
• :Fair Market Value:
• :FHA Loan:
• :First-Time Homebuyer:
• :Housing Choice Voucher Program:
• :Lease:
• :Lessee:
• :Lessor:
• :Low-Income Housing:
• :Mortgage Loan:
• roperty Value:
• ublic Housing:
• :Residential Property:
• :Real Estate:
• :Rent:
• :Starter Home:
• :Tax Credit:
• :Tax Deduction:
• :Tenant: