What is affordable housing? How to find and qualify for it

As housing costs continue to rise across the country, more people are searching for solutions that can help them secure a safe, stable place to live without stretching their budgets too thin. Affordable housing is designed to meet that need, but understanding what it is, how it works, and how to qualify can feel overwhelming.

We’re here to help guide you through the essentials of affordable housing, from its definition to the different types of programs available. We’ll also break down who qualifies, how to apply, and what common myths may be standing in your way. Whether you’re planning for the future or looking for immediate options, this information can help you take the next step with confidence.

What is affordable housing?

The U.S. Department of Housing and Urban Development (HUD) defines affordable housing as any housing where the occupant is paying no more than 30% of their gross income on total housing costs, including rent or mortgage payments and essential utilities like electricity and water.

While the term used to be closely associated with low-income or subsidized public housing, it now applies more broadly. With rising housing costs across the country, many middle-income individuals and families also find themselves in need of housing that fits within this 30% income threshold.

Despite this broader application, most HUD housing assistance programs continue to prioritize helping low- and very low-income households. These programs aim to provide safe, stable housing options while allowing individuals and families to afford other basic needs like food, transportation, and healthcare.

Eligibility for affordable housing often depends on a combination of factors, including your gross monthly income, local median income levels, and specific program requirements within your community.

What makes housing unaffordable?

Across the United States, finding affordable housing has become increasingly difficult for individuals and families at a range of income levels. While the HUD continues to expand efforts to support those most in need, economic challenges have made it harder for supply to meet demand.

Several key factors are driving today’s housing affordability crisis:

• Low housing inventory: There simply aren’t enough homes available, especially in fast-growing cities and suburban areas.
• Rising home prices: In many markets, prices have outpaced wage growth, making it more difficult for buyers to stay within the 30% income guideline.
• Higher construction and land costs: Builders face increasing material prices and labor shortages, which slows down new construction.
• Increased demand: As more people seek affordable housing options, existing programs and rental properties are under greater strain. 

Because of these factors, affordable housing programs nationwide often have long waitlists. However, that doesn’t mean it’s out of reach. Planning ahead and staying informed about application windows and local options can make a big difference. You may also find it helpful to monitor housing trends to better understand when and where opportunities could open up.

How does affordable housing work?

Affordable housing is designed to make sure that individuals and families don’t spend more than 30% of their gross monthly income on housing and utilities. These programs aim to create safe, stable, and affordable living conditions for people who may be priced out of the private housing market due to rising costs or low wages.

Area Median Income (AMI) is at the center of determining eligibility for affordable housing programs. Households earning below certain percentages of the AMI (typically 30%, 50%, or 80%) may qualify for assistance. Government subsidies then help close the gap between what a household can afford and what housing actually costs in that area.

There are three main types of affordable housing programs:

• Public housing: Public housing consists of properties owned and managed by local public housing authorities. These units, ranging from single-family homes to apartment complexes, are rented at reduced rates to eligible low-income individuals and families. Rent is typically calculated as a portion of the tenant’s income, which helps ensure affordability while providing a long-term housing option.
• Housing voucher programs (Section 8): Housing choice vouchers, often referred to as Section 8, give recipients more flexibility. Instead of moving into a specific public housing unit, voucher holders can rent a home or apartment in the private market. The government subsidizes the difference between the tenant’s contribution and the unit’s fair market rent, making private housing more accessible. Some vouchers, like Section 202 for seniors or Section 811 for individuals with disabilities, are tailored to specific populations.
• Affordable homeownership programs: For those pursuing homeownership, programs such as HUD’s HOME Investment Partnerships Program or local first-time buyer initiatives offer down payment assistance, reduced interest loans, or discounted home prices. These initiatives help moderate- and low-income buyers transition from renting to owning while still staying within the 30% income rule.

In every case, government subsidies and income-based limits play a critical role in making housing more attainable. Whether you're renting through public housing, using a voucher, or working toward buying a home, these programs are structured to bridge the affordability gap and support long-term stability.

How is an affordable housing community determined?

An affordable housing community, such as a designated apartment complex or housing development, becomes eligible for HUD subsidies when it meets specific federal standards and serves low- or moderate-income residents. These communities may be developed by public agencies or private landlords who agree to keep rents affordable in exchange for government support through programs like public housing, Low-Income Housing Tax Credits, or project-based Section 8 assistance.

To qualify for these subsidies, the property must commit to setting aside a portion (or all) of its units for residents earning below a certain percentage of the AMI. In return, HUD helps cover the cost difference, making it financially viable for landlords while ensuring more people have access to stable housing.

Local public housing authorities (PHAs) play an important role in managing and maintaining these properties. Their responsibilities include:

• Overseeing compliance with HUD program rules and income limits.
• Inspecting and maintaining properties to ensure they meet basic safety, health, and sanitary standards.
• Managing waitlists and applications for public housing or subsidized units in their area. 

These standards help guarantee that affordable housing isn’t just accessible, it’s also safe, clean, and supportive of long-term stability for residents. While availability can vary by location, knowing that these communities are held to consistent quality benchmarks can help you feel more confident when exploring your housing options.

What is area median income (AMI)?

Area Median Income (AMI) is a key figure used by the HUD to determine who qualifies for affordable housing programs. AMI reflects the midpoint of a specific region’s income distribution, meaning half the households in an area earn more than the AMI, and half earn less.

HUD calculates AMI by analyzing national survey data in collaboration with the U.S. Census Bureau. These calculations are updated annually to reflect current income trends and cost-of-living changes across the country. Income limits are then set based on both location and household size, which help determine eligibility for various housing assistance programs.

From the survey information, HUD locates the midpoint in a region’s income distribution. After that, the department splits the AMI into different levels according to household size:

• Extremely low income: Below 30% of AMI
• Very low income: Below 50% of AMI
• Low income: Below 80% of AMI
• Moderate income: Between 80% and 120% of AMI

If you’d like to see the most recent income limits for your area, you can use HUD’s Income Limits by Geography tool. You can also use the Fannie Mae AMI Lookup Tool to verify whether your income falls within qualifying ranges for certain housing and mortgage programs.

Understanding your AMI category can help you determine what types of housing support or financing might be available to you. To explore loan options based on your income level, visit this guide to mortgage types from Rocket Mortgage.

How do I qualify for affordable housing?

Qualifying for affordable housing depends on your household income, family size, and where you live. Whether you're looking to rent through a subsidized program or buy a home through an income-based initiative, the first step is showing that your income falls within the limits set by the HUD. These limits are based on your area’s median income and are updated annually.

If you're applying for a public housing unit, a housing choice voucher, or a homeownership program, you’ll need to submit an application through your local public housing authority or a participating agency. Each state or local program may have slightly different requirements, but in general, you should be prepared to provide documentation such as:

• Proof of income, such as recent pay stubs, tax returns, or benefit statements
• A valid state ID or passport
• Birth certificates for all household members
• Social Security numbers for each member of the household
• Employment information, including current job status and employer contact
• Rental history or references from previous landlords
• Proof of assets, such as bank statements or retirement accounts

To make the application process go as smoothly as possible, stay organized and gather your documents ahead of time. Keep both physical and digital copies in one place, and consider reaching out to a social service agency or housing counselor for help navigating the application. Follow up regularly to check your status and respond quickly if more information is requested.

Keep in mind that requirements may vary by state and program, so it’s a good idea to check with your local housing authority for specifics. You can learn more about the process and your eligibility by visiting HUD’s public housing resource page.

How to find affordable housing 

Whether you’re renting or buying, finding affordable housing can feel overwhelming, but you don’t have to navigate it alone. Here are some practical, encouraging steps to help you stay focused and make steady progress:

• Know your numbers: Understand how much you can comfortably spend on housing. Use tools like mortgage calculators or HUD’s AMI lookup to determine what’s truly affordable based on your income, debts, and monthly expenses.
• Identify organizations that can help in your area: Local housing authorities, nonprofit agencies, and community development groups often provide access to affordable housing listings, financial assistance programs, and application support. Start by contacting your local public housing authority or visiting their website for available resources.
• Attend information sessions: Many cities and nonprofits host free workshops or webinars on applying for affordable housing or qualifying for first-time homebuyer assistance. These sessions can provide essential insights and even connect you with professionals who can guide you through the process.
• Make sure your paperwork is in order: Preparing documents ahead of time can speed up your application process. Gather items like proof of income, photo ID, Social Security numbers, and references so you’re ready when an opportunity arises.
• Be patient: Demand often exceeds supply, and many programs have waitlists. Stay encouraged, follow up regularly, and explore multiple options. Remember, persistence and preparation go a long way in finding the right home. 

Why finding affordable housing is challenging

As discussed earlier, rising housing costs, low inventory, and increased demand have made affordable housing harder to access across much of the United States. While programs supported by HUD and local housing authorities are designed to help, the current economic climate means more people are applying than there are homes available, especially in high-demand areas.

If you're looking for affordable rental housing, it’s important to know what to expect so you can plan ahead and stay proactive. Here are some common challenges you might face:

• Extensive or closed waitlists: Many housing programs and public housing authorities operate on a first-come, first-served basis with limited availability. In some areas, waitlists can remain closed for months or even years.
• Restrictions on where you can live: Some housing vouchers or programs only apply to certain neighborhoods, counties, or housing complexes, which may limit your location options.
• Limited types of homes: Affordable housing often comes in the form of apartments or multifamily units. Single-family homes are less commonly available through subsidized programs.
• Compromising on features: You might need to be flexible on your wish list, such as square footage, amenities, or proximity to specific schools or workplaces, in order to find a unit that fits your budget.
• Ongoing documentation requirements: Affordable housing programs often require regular updates on your income, household size, and employment status to ensure continued eligibility. Staying organized and prepared to submit documentation will help avoid delays or disruptions.

While these challenges are real, they’re not impossible. By staying informed, organized, and patient, you can improve your chances of securing housing that meets your needs. Support from housing counselors, local agencies, and nonprofit organizations can also make a big difference throughout the process.

Affordable rental housing opportunities

If you're looking for affordable housing to rent, federal rental assistance programs are designed to help low- and moderate-income individuals and families find safe, stable housing. These programs are managed by the HUD and administered locally by public housing authorities (PHAs).

Two of the most widely used programs are voucher programs and public housing. Each serves a different purpose, but both are intended to bridge the gap between what renters can afford and what housing actually costs, helping more people access homes that are within reach.

Vouchers (Section 8)

Housing vouchers allow qualifying individuals and families to rent a home in the private market, rather than moving into government-owned housing. Once approved, a portion of your monthly rent is covered by the local PHA, while you pay the rest based on your income. This flexibility gives renters more choice in where they live while still receiving vital financial support.

To apply for a voucher, contact your local public housing authority to check availability, review income limits, and start the application process. Be prepared for waiting lists and follow up regularly to stay informed.

Common HUD Voucher Programs:

• Section 8 Housing Choice Voucher: For low-income families and individuals to choose their own home or apartment in the private market.
• Section 202 Supportive Housing for the Elderly: For seniors seeking affordable housing with optional services like transportation or meals.
• Section 811 Supportive Housing for Persons with Disabilities: For low-income, nonelderly individuals with disabilities who need housing and support services.
• Supportive Services for Veteran Families (SSVF): For veterans who are homeless or at risk of homelessness and need short-term rental or financial assistance. 

To find help in your area, take a look at local organizations listed through USA.gov’s rent assistance resources.

Public housing

Public housing refers to rental properties owned and managed by local public housing authorities. These properties are reserved for low-income individuals, families, seniors, and people with disabilities. Rent is typically set at 30% of the household’s adjusted monthly income, ensuring it stays within an affordable range.

Public housing units vary by community and can include anything from single-family homes to apartment complexes. While availability may be limited in some areas, your local PHA can help guide you through the application process and alert you when opportunities become available.

To find public housing in your area, visit HUD’s Public Housing Contact Directory or check USA.gov’s public housing page for more information.

What are my options for buying affordable housing?

Homeownership is a powerful way to build stability and long-term wealth, but for low- and moderate-income households, it can feel out of reach. Common barriers like saving for a down payment, limited credit history, and rising home prices can make the process especially challenging. Fortunately, there are a variety of programs at the federal, state, and local levels that are designed to help.

Federal resources

The federal government offers several programs through the HUD and other agencies to lower the difficulties of homeownership. These programs include government-backed loans and initiatives that support renters in transitioning to homeownership.

Here are some key HUD programs:

• Good Neighbor Next Door: This program offers a 50% discount on select HUD homes to law enforcement officers, firefighters, EMTs, and teachers. Participants must commit to living in the property as their primary residence for at least three years. It aims to support community development and help vital workers stay close to their jobs.
• Indian Home Loan Guarantee Program (Section 184): Designed for Native American and Alaska Native families, this program provides flexible underwriting and low down payments. It helps make homeownership more accessible for Native families both on and off tribal lands.
• FHA Loans: Backed by the Federal Housing Administration, FHA loans require a down payment as low as 3.5% and are designed for first-time or lower-income buyers. Borrowers may qualify with credit scores as low as 580, making it a good fit for those with limited credit history. Rocket Mortgage® is not acting on behalf of FHA or HUD.

State and local resources

Most homebuyer assistance programs are administered at the state or local level, often in partnership with HUD. These programs may offer:

• Directories of HUD homes, which are often foreclosed properties available at reduced prices.
• Down payment assistance, including grants and forgivable loans for eligible buyers.
• Access to local banks offering government-backed mortgages.
• Guidance from HUD-approved housing counselors, who can help walk you through your options and the application process.

Special-purpose credit programs (SPCPs)

Special-purpose credit programs (SPCPs) are targeted lending programs designed to expand access to credit for individuals and communities historically underserved by the financial system. These programs often offer down payment assistance, flexible underwriting, or lower interest rates to eligible borrowers.

Purchase Plus (HomeReady First) from Rocket Mortgage®

Purchase Plus from Rocket Mortgage is another SPCP we offer for clients who qualify.

Client will receive a 1 point (1.000) loan level price adjustment (LLPA) credit on HomeReady and Home Possible purchase loans locked on or after January 2, 2024. One point (1.000) is equal to 1% of the loan amount. Minimum credit amount will be $2,000. Maximum loan amount is $350,000. Offer is not available with any other discounts or promotions. Offer cannot be retroactively applied to previously closed loans or loans already in process; offer is not transferable. Rocket Mortgage reserves the right to cancel/modify this offer at any time. Additional restrictions/conditions may apply. This is not a commitment to lend.

This program requires that you live within an eligible census tract in one of 21 metropolitan statistical areas (MSAs) to apply:

• Atlanta-Sandy Springs-Roswell, Georgia
• Baltimore-Columbia-Towson, Maryland
• Brownsville-Harlingen, Texas
• Chicago-Naperville-Elgin, Illinois, Indiana, and Wisconsin
• Cleveland-Elyria, Ohio
• Dallas-Fort Worth-Arlington, Texas
• Detroit-Warren-Dearborn, Michigan
• Houston-The Woodlands-Sugar Land, Texas
• McAllen-Edinburg-Mission, Texas
• Memphis, Tennessee, Missouri, and Arkansas
• Miami-Fort Lauderdale-Pompano Beach, Florida
• New York-Newark-Jersey City, New York, New Jersey, and Pennsylvania
• Oklahoma City, Oklahoma
• Orlando-Kissimmee-Sanford, Florida
• Philadelphia-Camden-Wilmington, Pennsylvania, New Jersey, Delaware, and Maryland
• Phoenix-Mesa-Chandler, Arizona
• Riverside-San Bernardino-Ontario, California
• San Antonio-New Braunfels, Texas
• Louis, Missouri and Illinois
• Tampa-St. Petersburg-Clearwater, Florida
• Washington-Arlington-Alexandria, Washington D.C., Virginia, Maryland, and West Virginia

Eligible home buyers in these areas can receive a base credit of $5,000. Rocket Mortgage is contributing an additional lender credit of 1% of your home's purchase price up to $2,500, for a total credit of up to $7,500.

Although you have to be a resident of an eligible census tract when you apply, you can buy a home anywhere. Here are a few of the additional eligibility requirements besides property location:

• The house you’re buying needs to be a primary residence.
• At least one client has to be a first-time home buyer.
• You need at least 3% down (which can be covered completely or partially by the credit).

The bottom line: Affordable housing is attainable, but it takes time

Affordable housing plays a critical role in helping individuals and families find stability, build wealth, and plan for the future, but the process requires patience, preparation, and persistence. Whether you’re looking to rent or buy, programs exist at the federal, state, and local levels to help make housing more accessible. Understanding income limits, gathering documentation, and exploring all available resources can go a long way toward securing the support you need.

If you’re ready to take the next step toward homeownership, connect with a Rocket Mortgage Home Loan Expert to explore your options.