National housing programs have two strong areas of program emphasis: mortgage assistance and affordable housing. FHA mortgage guarantees help increase the level of real estate ownership in residential, cooperatives, and condominium units. Affordable housing fills gaps left by market forces for low-income residents, the elderly, physically challenged and veterans. Market factors can push rental prices far beyond the means of low-income applicants. The government acts to correct this imbalance and create opportunities for residence and ownership across economic lines.
FHA Mortgage Assistance Programs
The FHA plays a key role in mortgage financing in the US. It provides guarantees to lenders so that they will make as many qualified loans as possible. It works to stabilize financial markets and provide insurance for mortgage repayment. It also works to provide reverse mortgages for seniors to keep them in their homes after retirement.
HUD Public Housing Units
The two main Public Housing Agency Programs provide long-term housing for low-income families. The assistance includes direct residential units, or public housing projects, and vouchers that subsidize private rental agreements. Public housing agencies provide homes for about 1.3 million households. These properties are owned and operated by local government agencies and built with state and federal funds. They represent a commitment to providing housing in markets with critical shortages of available housing.
HUD Housing Vouchers
The section 8 program was consolidated and renamed the Housing Choice voucher program. It is a rent subsidy program for low-income residents. It offers a flexible approach to a partnership between private housing providers and local housing agencies. Once approved for participation, a low-income family can go into the marketplace and find suitable housing that meets their needs. The local housing agency must inspect and approve the physical location, and then negotiate terms of payment. The HUD program covers all but the renter’s share of payments. HUD guidelines set the renter’s share according to its rules on affordable housing that require no more than thirty percent of household income for housing costs.
Vouchers for Vulnerable Groups
The Housing Choice program provides voucher subsidies for several vulnerable classes of low-income residents. They include the elderly, the disabled, low-income physically challenged, and low-income veterans. These groups are vulnerable to market factors that limit affordable housing defined as housing costs at thirty percent of household income or less. Section 811 provides support for affordable housing for the low-income physically challenged and physically challenged elderly residents. Section 202 supports subsidies for elderly residents to provide affordable senior living communities and facilities.
Increasing the Supply of Affordable Housing
In areas with active real estate markets, there are often low levels of affordable housing. Low levels result from the dynamics of the marketplace that drive rental prices higher when many buyers purchase homes or condominiums. In these markets, rental housing is a slightly lower cost alternative to home purchasing. Section 202 Programs offers cash support for local companies and organizations that build, rehab, or otherwise increase local housing units. Once built, the Section 202 program provides rental subsidies to meet the differences between private market value and affordable rental prices.
State Housing Agencies
State and local agencies administer HUD community development grant programs. Some programs use block action grants that rely on local discretion to choose particular applications, and some have general spending categories. Community development grants are an important source of local innovation and creative partnerships with community organizations and local businesses. The low-income housing tax credits program rewards firms that build new low-income housing units and that increase the supply of affordable housing.