By Cindy Moore on Thursday, 21 January 2021
Category: Senior Help Topics

A Guide to Low-Income Senior Apartments

Low-income senior housing is a very broad topic and the term “Low Income” can be quite relative. Something affordable to one senior household may not be affordable to another. For the most part, however, an elderly person (or household) that is on a low, fixed monthly income receives no other outside financial support, and has less than $5,000 in assets is usually considered to be a low-income senior household. Beyond that, each program will impose specific income and age limits along with other eligibility criteria to determine whether they qualify for that particular program.

In this article, we will go over what affordable senior housing is and the low-income senior housing programs that are currently available in the United States. By the end of this page, you should have a clear idea of:

What is Low Income Senior Housing?

Low-income senior housing generally pertains to government-subsidized rental units that have been made available to those who are elderly. Rents can be subsidized, paid by credits, paid by vouchers, or cost-controlled depending on the program that is selected. Some of the most affordable senior living options require that income levels be considered “very low” and will also require that community owners keep the rents charged at a very low median average to participate in the subsidy. Some of the programs, like the Housing Choice Voucher Program (HCVP), do not require that tenants be elderly but are still available to seniors if they so desire.

As Americans live longer and the cost of housing rapidly rises, many seniors find themselves unable to afford their current housing situation. Many elderly people who live on a fixed income find that the availability of affordable senior living options is minimal or non-existent.

This lack of options represents a real problem with low-income seniors across the US. In 2016 the US Census reported that more than 7.1 million senior adults in the US live in poverty. By 2018 the National Council on Aging reported that 25 million seniors were living at or below the federal poverty level (FPL). This is why finding affordable Senior Housing is so important to millions of people across the US.

 

What Senior Housing Programs are Available?

While there may be others that are available, the most popular low-income senior housing programs are offered as either tax credits to developers or as subsidies to communities or tenants. The three programs that offer the greatest help to seniors are:

These are very different programs, and each program imposes its unique requirements and processes to qualify. While some of the programs below are specific to the elderly, many are not and may not have some of the supportive services that are needed by an aging person.

Program 1: What is HUD’s Section 202 Supportive Housing for the Elderly Program?

HUD’s Section 202 Supportive Housing for the Elderly  (also known as the Affordable Senior Housing Program) is a branch of HUD’s Section 8 Program Department of Housing. The program works by providing low-rate loans for non-profit senior community developers at a very low cost. Another component of this program is the guarantee of funds in the form of rental subsidies with the requirement that tenant applicants of these communities meet eligibility requirements. Although the Section 202 program has been around since 1959, funding for the development of new affordable senior housing communities isn’t often made available by the federal government. In fact, in 2019 a Notice of Funding Availability was released for the development of these communities for the first time in ten years.

Section 202 housing is available for seniors over the age of 62 who meet HUD’s low-income or Very Low-Income criteria. The program is unique in that tenant applicants can just call the community directly to set up a qualification interview. Typically, the community manager will arrange the meeting, which is in person, and the applicant will be required to bring in several pieces of information to prove that they qualify for the unit.

The interviewer will check the resident’s income and will require that they bring in some very specific pieces of information to qualify. For the qualification to move along quickly and smoothly, applicants must supply their complete and correct information. The whole qualification process can be lengthened unnecessarily when applicants come to their interviews unprepared.

In addition to having the opportunity to pay very low rents, seniors can also find many supportive services that can be provided by the Section 202 Community. Most, but not all, make use of the additional government allowance that is given to these communities when they hire a senior Services Coordinator (SC). If you want to read more detailed information about the Service Coordinator and dive deeper into the Section 202 communities then be sure to read Section 202 - Low-Income Senior Communities That Care.

Program 2: What is HUD’s Section 8 Housing Choice Voucher (HCV) Program ?

The Housing Choice Voucher Program is the federal government’s largest program for assisting low-income families, elderly families, and the disabled to be able to secure and afford sanitary and safe living within standard rented units and homes. Although this program is not set aside specifically for the elderly, it is certainly available to them.

Typically, subsidized programs will pass on the rental payment directly to the qualifying home or apartment owner, but with HCVP the voucher is given directly to the resident, so that they may locate and rent a residence that best fits their needs. If and when a tenant decides to move, the voucher goes with them, so they are not obligated to stay in one assigned unit. The voucher program does not require that the tenant live at any one specific property, but when they do select a property the selected property’s owner must be willing to accept the voucher. Not unlike other Section 8 properties, rental units must meet the Public Housing Authority’s (PHA) minimum standards of health and safety. Sometimes this requires modification to homes and units (like widening doorways and adding ramps) that owners are not always willing to undertake. It is up to the resident to locate a rental property that is eligible by the PHA, where the owner is willing to accept the voucher, and that is acceptable to the resident.

Typically, housing choice voucher applicants must go through an extremely lengthy process of enrolling in the program and being placed on a waiting list to get called for a qualification interview; this is known as enrollment. The term here, “enrollment”, is very misleading in that it does not enroll the applicant in anything other than an appointment to be interviewed. Once they get called for the qualification interview, they will be qualified through a PHA officer at a local public housing agency and will wait on a long waiting list to be awarded a voucher that can be used toward paying their monthly rent.

In our detailed guide, How to Navigate HUD’s Housing Choice Voucher Program, we cover all of the steps that applicants need to take to ensure their best chance at successfully obtaining a voucher.

Program 3: What is the Low Income Housing Tax Credit (LIHTC) Program?

The Low Income Housing Tax Credit (LIHTC) Program was created as a tax credit. This credit is given to private investors to build communities that include both low-income apartments and low-income senior apartments. The program was created for the purpose of increasing the available supply of low-income rentals. Credits, in the form of dollar-for-dollar tax breaks, are awarded to builders, and, in return, those builders must offer units to tenants whose incomes are no more than 50 – 60% of the Area Median Income (AMI).

The amount of rent is set by the community’s owner and is based on the area’s median income and not the tenant’s income, although tenants of the low-income units still must meet income eligibility criteria. Even if a tenant’s income increases or decreases while they are in the unit, LIHTC rental amounts do not increase or decrease and a tenant will not be asked to move if their income increases beyond the bounds of the income limits. However, once a tenant moves, they must continue to meet income criteria to be eligible for another unit under the LIHTC program since it is intended for low-income residents.

Interestingly, those who have already obtained a rental housing voucher can use it to pay for all or part of a LIHTC unit. Not all units that are available at a LIHTC Housing Community are offered for rent reduction to low-income seniors. Only a certain percentage of the units are set aside for low-income residents, and only a percentage of those low-income units are set aside for residents who are age 55 or older.

Just like the Housing Choice Voucher Program, LIHTC is not a program specific to seniors, and because it bases its rents on the income levels of the surrounding area (Area Median Income), rents tend to be higher at these units. Many low and low-income seniors may find the rental rates to be too high for their budgets.

To help you locate and learn more about the LIHTC Program, please see How Does the Low-Income Housing Tax Credit Work for Elderly Residents?

Do I Qualify for Low Income Senior Housing?

Every low-income senior housing program will have its own set of criteria for eligibility into the program. When more restrictions are placed on tenant types, like those residences strictly for seniors, the eligibility requirements become more stringent. Below we will briefly cover each of the eligibility highlights for each program, but for a more complete detailed guideline of each program type see Five Sure Steps to Qualify for Low Income Senior Living.

What are the Qualifications for Section 202 Senior Housing?

Residents of Section 202 Supportive Housing for the Elderly must be at least 62 years of age and have household incomes that meet HUD’s low-income or Very Low-Income criteria.

Aside from the documentation required, the applicant must supply detailed information for every member of their household (those who will reside with the senior resident). There are strict guidelines on who can and who cannot reside within an affordable senior living community. Once the interviewer has collected all of the required information, they will perform a very stringent verification process that involves background checks, calls to prior residence managers, and will dive into the applicant’s financial history and credit rating.

For complete details on the entire qualification process be sure to visit our Five Sure Steps to Qualify for Low Income Senior Living guide that covers everything that is needed for qualifying for Section 202 housing.

What are the Qualifications for the Housing Choice Voucher Program?

Tenants who are interested in obtaining a housing choice voucher must apply through their local Public Housing Authority. As stated before, those appointments are only given during open enrollment. Public Housing Authorities are local, and open enrollment happens on a local level. If it is determined that there is adequate space open and the waiting list for units is low, a local PHA will open enrollment. Typically the PHA will run a local news ad and place a notice of open enrollment on their website. You must call around to different PHAs to determine if enrollment is open at each location. For your convenience, we do keep a list of Open Enrollment Cities in Alabama. We will be adding more states as the data becomes available.

In most cases, the tenant’s household income cannot exceed more than 50% of the median income limits (average income for the area). In short, they cannot make more than half of what the area’s average income is. To determine a tenant’s eligibility, the tenant applicant will be asked to provide legal documents to prove identity, age, banking information, and background information. Because the housing vouchers are not senior-specific the only age requirement is that the head of household must be at least 18 years of age.

What are the Qualifications for the LIHTC Program?

Since the LIHTC Program is overseen by each property’s management team, applying for an LIHTC falls in line with a more conventional application process. However, eligibility is still limited to those individuals whose income levels fall below 50% of the area’s median (average) income levels.

In addition, the property units will have some set-asides that are for senior-only tenants. In the LIHTC Program, units set aside for seniors must include at least one member of the household who is over the age of 55.

Because the properties are a mixture of conventional units that are not set aside for low-income, and low-income units that are, it is often difficult to locate these types of units. However, we have assembled a comprehensivelist of LIHTC list of LIHTC properties to help you with your selection process.

Can Family Members Live in Senior Housing?

With some of the programs, age is not an issue, so having family members with children is perfectly fine. For Section 202 Supportive Housing for the Elderly, however, most communities will require that family members may only reside with an elderly parent if they are over the age of 18. Once a senior no longer resides in the unit, other household members will be required to leave. Those family members who do reside within a senior’s unit must alsomeet eligibility criteria and their income will be counted toward the senior’s household income and may affect the senior’s income eligibility. Along with financial and supportive documentation, applicants will be required to show proof of identification regardless of the program they are applying for. However, since program eligibility criteria differ from one program to the next, so do the household tenant requirements.

For the HUD programs (Section 202, Public Housing and the Housing Choice Voucher Program), HUD requires all applicants and all household members to verify their US Citizenship or immigration eligibility status by filling in a citizenship declaration form. All household members must be able to provide a social security number or produce records of their immigration eligibility by the time an apartment has been offered or the next eligible applicant will be offered the unit. If they cannot provide this documentation by the period set by the community (usually 90 days), the applicant may become ineligible.

All household members will be subject to the following criteria:

How Low Income Senior Housing Rent Amounts are Determined

For all programs except the LIHTC program, the rent a resident will pay for an affordable senior housing unit is determined by the resident’s monthly adjusted income. Monthly Adjusted Income (MAI) is calculated by adding together all household incomes, and then subtracting any income exclusions (like medical reimbursements) from the incomes.  The total of this is called the Annual Income. Then deductions (like credits and allowances) are subtracted from the Annual Income to get the Adjusted Income. The Adjusted Income is what the rent will be based on. HUD uses a specific order of priority in determining how to establish a tenant’s rent. Please see the What are the Qualifications for Low-Income Senior Housing topic to learn what these are.

For the LIHTC Program, the rents are determined by an area’s median income rates and are tied to each unit as a rent base amount. A unit’s rate is usually between 50% - 60% of median income, divided by twelve. The LIHTC tenant will pay 30% of the rent base amount. One unit may have a higher rate than another unit, depending on its features. Rent is determined by taking the area median rate and dividing it by the unit’s rate. So, if a unit’s rent rate is 50% and the area’s median is $75,000, the unit’s rent base would be $37,500. The tenant’s portion would be 30% of that, so their annual rent would be $11,250.00, which would be $937.50 per month for rent.

What to Look for in Affordable Senior Housing Communities

Many of the programs are funded by HUD or are administered by HUD.  All HUD properties are subject to HUD’s Standards of Safety, which state that properties must be decent, safe, sanitary, and in good repair. In addition, HUD sets very specific additional criteria for its properties and each property must be inspected to continue to qualify for Section 8 funding.

LIHTC Communities

Since these communities are constructed for both low-income and regular-income residents by private funding, each community’s features can vary significantly from one property to the next. It is important to evaluate each property to ensure that the units offered within it are a safe and viable option for a person who has aging needs.

Section 202 Low-Income Senior Communities

Most of the HUD Section 202 Affordable Senior Housing communities will offer very similar features.  This is because there are program regulations in place that require that each community conforms to meet the basic needs of the elderly and disabled. While each community will have its special features, all Section 202 properties will at least include the following:

In addition to having the same requirements for building and community standard features, there are also a minimum number of requirements for on-site services for all Section 202 Supportive Housing for the Elderly. All of these low-income senior communities must offer “necessary services” to their residents. Necessary services can include services for meals and nutritional services, health, welfare, informational, recreational, homemaking, counseling, continuing education, and referral services, as well as some transportation assistance to get access to these services.

Affordable Housing Future Projections

By 2030 it is estimated that the number of adults over the age of 65 will be about 72 million people, which is roughly 1 out of every 5 Americans. For the first time in our nation’s history, we will have more seniors than we have children. Of that number, more senior Americans are projected to enter the federal poverty level than ever before. At that same time, housing prices and living costs are projected to increase significantly. The combination of the rising cost of living, low wages, and a lack of availability of affordable senior housing has caused many federal and state agencies to refocus on improving the lives of those vulnerable low-income seniors. Funding must be made available to the programs that incentivize investors to create and improve affordable senior housing options for low-income households.