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Having a roof over your head and access to housing you can afford is a necessity for you and your family, yet when cities grow and expand it can push the cost of rent up and leave low- to medium-income residents unable to afford even a basic rental. All of this is currently compounded by the pandemic, which is leaving many feeling insecure about their ability to pay rent. But what you might not know is there are programs out there working to alleviate some of the burden on low- to medium-income renters.
In 1986, the federal government created the Low Income Housing Tax Credit Program (LIHTC) to incentivize private entities and owners to acquire, construct and rehabilitate affordable housing for low- and moderate-income residents. The federal government gives the tax credits to the state’s housing agency, which then allocates them to private entities and owners, giving them a dollar-for-dollar credit against their federal income tax liability each year. The ultimate outcome is an increase in affordable housing properties and rent payments that fall below market value for those who qualify to live there.
The LIHTC has subsidized over 3 million housing units since it was established in 1986 and is the largest source of affordable housing financing. So who qualifies for this type of housing and what’s the process?
Who Qualifies?
Qualification is decided based on a number of factors. The first is your household income level. The Department of Urban Development publishes a Maximum Income Limit every year, and the household must fall below that number in order to qualify. Generally, a household applying for the program (single or married) must make less than 60% of the area median income (AMI), but there are variations based on household size and the area you live in. Different apartment buildings may choose to rent to people who make 50% AMI, 40% AMI or even 30% AMI – the property owners have the ability to make these decisions. However, your qualification is not based on income alone. It will also depend on your credit, criminal background and income verification.
What’s Next?
Affordable housing is a cause we are deeply committed to here at Wisconsin Management Company and we are currently managing over 2500 affordable and accessible units. But, if you believe that you may qualify for affordable housing, you can follow this link to search for a full list of apartments in Wisconsin that offer this option.
As part of the process, you can expect to be interviewed, fill out an application, agree to a background check and credit report, and also submit your rental history. Most importantly, you will have to show proof of income. Income includes:
- Wages
- Commissions or Tips
- Monetary Gifts
- Unemployment
- Child Support
- Social Security
- Income from Assets
It’s important to remember that while this program has been in place for a number of decades, there are only a limited number of affordable housing options available and so you likely won’t get into a place right away. Instead you will be placed on a waiting list once approved and then contacted when a unit becomes available.
The LIHTC provides an incredible opportunity for both landlords and renters alike. If you have any questions or believe you qualify based on your income level and would like to apply, reach out to us via our contact page.