If making your rent each month means bottoming out your checking account, you aren’t alone. A 2020 study by Clever Real Estate found that inflation-adjusted rents rose 72% between 1960 and 2017, real home prices rose 121%, but real incomes rose only 29%.
Which means Americans now spend a greater proportion of their income on housing than ever before. This bidding-up of housing costs has left many Americans unable to afford this most basic of amenities.
In turn, that’s led to the creation of countless federal, state, local, and nonprofit programs all designed to help lower-income families afford housing. While the sheer number and red tape of these programs often feels daunting, help exists for those who need it.
Federally Funded Housing Programs
The federal government funds a series of programs designed to keep a roof over every American’s head. In most cases, they fund these programs through local administrations.
Keep the following programs in mind as you explore your options for rent assistance.
1. Section 8: Housing Choice Voucher Program
The Department of Housing and Urban Development (HUD) Section 8 encompasses two distinct programs: the Housing Choice Voucher Program and project-based assistance.
In the former, the benefits tie to the tenant, not the property or owner. You as the tenant apply through your local public housing authority (PHA), and once approved, you get a rent assistance voucher that you can take to any property and landlord.
Well, sort of. Not all landlords accept Section 8 vouchers, and even those who do must meet rigorous property inspection criteria. Still, plenty of landlords are happy to accept Section 8 for the consistent rent payments, so voucher holders typically have abundant options.
With Section 8, you pay a portion of your rent and your local housing authority pays the remainder. The PHA sets a base voucher amount based on current market prices in your area. An agent then deducts 30% of your monthly income from the base amount to determine your monthly assistance. You can choose to rent a property that costs that amount, or rent one that costs more if you can afford to pay the difference.
Qualifying for the Housing Voucher Program can prove tricky. To do so, you need to:
- Meet your state’s low-income requirements
- Find a Section 8-approved property
- Pass a background or credit check performed by the landlord
- Provide references to the landlord
Many local Section 8 voucher programs have long wait times. The PHA can wait-list you for months or even years after you apply. But the incredible benefits and flexibility make it worth the wait for those who qualify.
2. Section 8: Project-Based Program
Section 8’s project-based program works directly with property owners rather than renters.
Participating landlords agree to rent to low-income families, defined as earning less than 80% of the local median household income. Additionally, 40% of the property units must rent to extremely low-income renters earning less than 30% of the local median household income. In return, HUD pays the majority of the rent to the landlord.
Although still operating, HUD stopped partnering with landlords on new projects in the 1980s. The existing partnerships continue funding so long as landlords keep renewing their contracts with HUD, but these contracts have slowly fallen off over time as landlords decide not to renew.
3. Public Housing
Public housing is a federally subsidized type of rental property. Depending on where you live, it may be an apartment complex, a series of duplex houses, or a cluster of single-family houses. These areas are often gated and may have small parks, pools, and other green spaces.
Although funded by HUD, public housing developments are managed by local housing authorities. Moving in works like renting from a private landlord: you must meet the housing authority’s qualifications and sign a lease. But unlike renting from a private landlord, the housing authority determines how much rent you pay — at least $25 or at most 30% of your monthly income, according to HUD guidelines.
To qualify for public housing you must:
- Meet low-income limits in your state
- Be a U.S. citizen or have an eligible immigration status
- Provide references
- Pass a background check
- Meet with a housing authority agent in person
Public housing facilities have limited space but often high demand, leading to wait times of months or even years before a unit opens up in your area. If there are no openings when you apply, your name goes on a waitlist.
4. Rental Assistance in Rural Areas
If you live in a rural area, you might qualify for a special type of private subsidized housing offered by the United States Department of Agriculture (USDA). Rather than a single program, the USDA oversees several initiatives designed to support low-income rural Americans. These initiatives are generally referred to by the Section number of the law that created them.
Under the Section 521 program, the USDA provides rental assistance similar to Section 8 vouchers. The USDA pays part of the tenant’s rent payment directly to the landlord.
But not just any landlord. Participating owners received subsidized loans at 1% interest, spread over 50 years, to build these low-income housing units through the Section 515 program. In return for such favorable financing, the landlords agree to rent to voucher holders at a low profit margin or for no profit at all.
To apply for the Rural Rental Assistance program, you need:
- Proof that your income level is at or below the USDA’s income limit
- Proof that your rent exceeds 30% of your income
- To pass the landlord’s requirements, which can include a credit and background check
Unlike other low-income housing options managed by HUD, the Rural Rental Assistance program is managed by the USDA. To apply, contact your local USDA Rural Field Development office. Use the USDA Service Center Locator to find the contact information.
5. Section 811: Supportive Housing for Persons with Disabilities
Created in 1990 as part of the Cranston-Gonzalez National Affordable Housing Act, Section 811 offers grants to nonprofit developers who build low-income housing for adults with disabilities. This housing could take the form of group homes, independent living facilities, multifamily rental units, condo units, or cooperative housing.
To receive grants, developers must also provide ongoing support services for disabled residents.
Participating renters cannot earn more than 50% of the local median income. Section 811 also includes funding to directly subsidize participants’ rent payments. Read the Congressional Research Service (CRS) report on Section 811 for full details.
6. Section 202: Supportive Housing for the Elderly
Older renters may also qualify for affordable housing through HUD’s Section 202 program.
The program works with nonprofit housing developers, providing them with funds to build low-rent housing. Renters then apply directly with the property owner.
To qualify, renters must be 62 years of age or older and earn no more than 50% of the local median income. For program details see the CRS report on Section 202.
7. Mixed-Income and Other Privately-Owned Subsidized Housing
The government offers a series of tax credits and other incentives to developers for building low- or mixed-income housing. In some cases, housing developers earn tax credits in exchange for building and providing affordable housing.
For mixed-income housing, the owners must rent a certain percentage of the units for reduced rents to low-income residents, and can rent the other units at market rent. That usually means the market tenants end up subsidizing the low-income tenants.
Some landlords offer a flat reduced rate for anyone who qualifies, while other landlords base your rent on your monthly income. Generally, the less you earn each month, the less rent you have to pay.
To qualify for privately-owned subsidized housing you have to:
- Make less than the maximum monthly income amount — this varies by housing complex and by state
- Pass a background check
- Meet the landlord’s qualifications to rent, which could include passing a credit check.
You’ll need to apply directly through the landlord to get a reduced rate. However, you can find available complexes in your area by using HUD’s low-rent apartment search function.
For more on mixed-income housing, see this overview by the National Housing Conference.
State and Local Housing Programs
Many state and local agencies offer their own rent assistance programs.
For example, some state programs include emergency rent assistance options. If you find yourself in a bind and are at risk of eviction, you might qualify for one-time assistance to help get you over the hump.
Other programs include subsidies for people with special needs or disabilities. Or, if you have trouble maintaining a budget each month, many states and cities offer free financial literacy and money management counseling that can help you keep up with your rent.
Research the programs in your state and city, and start by speaking with your local housing authority. They can help walk you through available programs that might fit your needs.
Start with the abundance of free research tools provided by the National Low Income Housing Coalition, which breaks them down by state. They even offer a state and local guide to low-income COVID-19 housing support services, to help connect people impacted by the coronavirus pandemic with resources to help cover their rent.
Private Charitable and Nonprofit Programs
Many charities and nonprofit organizations also offer one-time rent assistance. For instance, a charity might be able to help you pay a security deposit to move into a new rental. Some religious organizations maintain a fund specifically to help needy congregants, or may even own dwellings to offer at reduced rent for them.
These programs and their eligibility requirements vary by area. Again, the easiest way to find out what’s available is to contact your local housing authority office. You can also try search tools such as Affordable Housing Online.
And, of course, do your own research into local nonprofits that serve low-income residents. That includes online searches, but also ask around among both existing participants and local housing counselors.
Finally, you can always look into local rent-controlled housing. These tend to come with long waiting lists however, and sometimes grumpy landlords on whom rent control was forced involuntarily.
Even federal housing assistance programs are administered on the state or local level. That leads to wide variations in process, wait times, and standards. For instance, some states allow you to apply online, some require you to mail in applications, and others prefer that you visit the office in person.
To simplify the process, first contact your local housing authority. An agent there can tell you where and how to apply, as well as what state and charitable programs are available. You can find an office in your area on HUD’s Local Renting Information website.
Before you apply, make sure you have the following documentation ready:
- Your driver’s license or state-issued ID
- A copy of your lease agreement
- Recent pay stubs
- A copy of a recent bank statement
- At least two years’ tax returns
- Social Security numbers for everyone in your household
Remember, even if you meet all the qualifications, these programs can still turn you down. Given their popularity, many come with extensive waiting lists. And being administered by government bureaucracies, some simply come with so much red tape that first-time applicants struggle to follow the byzantine requirements. Keep at it until you contort past these barriers to entry.
Other Creative Options for Cheaper Housing
As useful as subsidized rent payments are, they aren’t the only way to score cheaper housing. Consider the following more creative approaches to reduce or even eliminate your housing costs.
- Jobs Offering Free Housing: Some jobs provide free housing, which might just be the best job benefit imaginable. My wife and I have actually enjoyed free housing through her employers for the past six years, which has let us supercharge our savings rate. Start with these 20 jobs that offer free housing, but don’t end there!
- House Hacking: Traditional house hacking involves buying a small multifamily property, moving into one unit, and renting out the others. But it’s far from the only way to house hack — my friend has house hacked by renting out the master bedroom in her rented home, renting out storage and parking spaces, and even hosting a foreign exchange student to cover the bulk of her rent payment. Another friend rents out a semi-private suite in her apartment on Airbnb for a weekend or two each month, which covers more than half her rent.
- First-Time Homebuyer Assistance Programs: You’d be surprised at the number of programs available for first-time homebuyers with minimal cash. These include tax credits for first-time homebuyers, but also down payment assistance to reduce your down payment, and loan programs such as FHA loans, USDA loans, and Fannie Mae’s HomeReady program.
It’s a terrifying feeling — not knowing how you’ll make your next rent payment. But the federal government spends billions of dollars every year on rental assistance programs, which says nothing of state, local, and nonprofit programs.
Start by contacting your local housing authority and sitting down for a consultation. That meeting constitutes the beginning of your search but not the end.
Remember that these programs often take time to apply for, get approved with, and actually start serving you. Most programs have more applicants than they have funding for, and come with lengthy waitlists. Apply for any programs available to you, and never stop looking for smaller, lesser-known assistance programs that can help.