Low Income Housing

Finding Affordable Housing

As you're looking for a place to live, it's helpful to spend some time evaluating your household budget to determine how much you can afford to spend on your housing. Traditionally, experts recommend that housing not exceed 30 percent of your gross income. This includes rent or mortgage payments as well as all applicable utility costs. However, if you have unusual expenses, such as high medical bills or above average daycare costs for your children, you may need to look for housing that is only between 20-to-25 percent of your income.

Low Income Housing Assistance for Renters

The best known form of low income housing assistance in the United States is the Section 8 rental voucher program. Under this program, low income people are issued vouchers which they can use to find privately owned rental housing in their communities. With these vouchers, tenants pay about 30-to-40 percent of their monthly income for their rent and the Public Housing Authority pays the difference up to what is determined to be fair market value for that particular area.

To receive Section 8 low income housing assistance, you must apply at the Public Housing Authority Office nearest the area in which you want to live. Unfortunately, there are often long waiting lists for this program.

Help for Prospective Homeowners

Low-to-middle income Americans who wish to buy their own homes can get assistance from FHA loans. These federal assistance mortgage loans are issued by qualified lenders and insured by the Federal Housing Administration. FHA loans are particularly helpful for people who need a loan with a down payment of just three percent of the purchase price and have a past bankruptcy or foreclosure that would make it difficult to qualify for a conventional loan.

To learn more about FHA loan assistance, check out the following helpful articles

• FHA Mortgages
• FHA Qualification
• FHA Mortgages and Home Inspection Requirements

Since coming up with the money for a down payment on a home can be difficult for someone on a tight budget, the American Dream Down Payment Initiative offers grants that can be used with FHA loans. The amount of assistance provided can be up to $10,000, or six percent, of the purchase price of the home, whichever is greater. There are also various state and local programs providing similar assistance to help boost homeownership rates.

Low Income Home Energy Assistance Program

Once you've found a way to make your rent or mortgage affordable, you'll need to tackle the problem of rising energy costs. Assistance in this area is available from the Low Income Home Energy Assistance Program (LIHEAP). Each state receives federal grant money from this program to use for assisting low income people in paying for their utility bills. Eligibility criteria vary from state to state, however, so you'll need to contact your local LIHEAP office to learn more about how to apply for the program.

Other Options

While the programs listed above can be useful resources for lowering your housing expenses, there are other options that may help as well. For example:

• Consider getting a roommate. If you rent, sharing a two-bedroom apartment with a friend will be cheaper than getting a one bedroom apartment on your own. If you own your home, try renting out a spare room.
• Look for ways to conserve energy. Could you adjust the thermostat while you're at work to save money on heating and cooling costs? Could you take shorter showers or remember to turn off all the lights whenever you leave the room? Even something as simple as unplugging unused appliances instead of merely turning them off can help reduce your overall housing costs.
• Think about downsizing. Although there are costs associated with moving, downsizing to a smaller home or apartment may be the best option if your family is having financial difficulties that won't soon be resolved. Check out the LTK Save article on the Cheapest States to Live In for ideas on planning a move of this type.