Skip to content

What Is Income Restricted Housing?

Is housing simply too expensive where you live? Can’t afford to buy? And maybe you can’t afford to rent either! That’s where income restricted housing comes into play. If you qualify, you may be able to find a place that’s far cheaper than the norm, but still safe for you and your family.

What Is Income Restricted Housing?

Put simply, income restricted houses are dwellings that are owned and managed by local housing agencies. They are subsidized by the Housing of Urban Development (HUD). Currently, HUD assists nearly 5 million households through tenant-based vouchers, project-based subsidies, and provision of public housing. 

And, you may think that all the places are apartments and in densely populated areas, but this isn’t always the case. In fact, there are quite a few single family dwellings as well!

What is the Cost of Income Restricted Housing?

What kind of savings can you get if you qualify for an income restricted apartment? Based on a recent post by Apartment Search, the savings aren’t as substantial as one might think, but it’s still nothing to sneeze at.

Within the post, they provide an actual example in Phoenix.

  • The typical rent for a one-bedroom apartment was $860 a month. 
  • Income restricted housing would bring that rent down to $777 a month – a savings of 10% each month and over $1,000 a year.

Another point of reference comes from Affordable Housing Online. They state that income restricted housing is often below market value, but again, isn’t substantially discounted. Instead of a $700 apartment, the rent may be something like $500.

Not a major savings, but when you’re paycheck-to-paycheck, $100-$200 a month can really feel like a huge help!

Related: Top 3 Misconceptions About Income Restricted Apartments

income restricted housingHow to Find Income Restricted Housing

If you’re interested in finding a home or apartment that’s income restricted, I’ve found that the best place to go is

  • Filter by apartments
  • Then “income restricted”

Here’s a link to a pre-filtered example in Omaha, Nebraska. Simply change the location to view what’s available in your area.

How Do You Qualify?

How do you know if you qualify for income restricted housing?

To qualify, you must prove that your income is just 60% of the median income in your county.

  1. Find the HUD calculated median income for your area via this link.
  2. Then, click on the most recent year, and click on the button titled “Click here for MFI (Median Family Income) Documentation”
  3. Scroll down toward the bottom of the text to find the median family income for your area

Out of curiosity, I continued with the Omaha, Nebraska location. The median family income there is $87,000 per year. So, to qualify for income restricted housing in Omaha, you’ve got to have an income that’s less than 60% of that figure, which equates to $52,200 or lower.

If you meet the 60% criteria for your county, you can apply for a Housing Choice Voucher by contacting a public housing agency in your state. That, or contact your local HUD office. They’ll certainly have the details to get you approved.

What About Section 8 Housing?

Section 8 housing is also referred to as the “Housing Choice Vouchers Program“, which is the federal government’s major program for assisting very low-income families, the elderly, and the disabled.

The housing is owned by private individuals, and the program is not limited to units that are located in subsidized housing projects. If the owner’s units meet the criteria for Section 8, they can rent out the property as such.

Is Section 8 Housing Cheaper than Income Restricted Housing?

For Section 8 housing, the deduction off of rent is dependent on your income. So, the rents might be more than income restricted housing, or they might be less! It all depends on your income.

The maximum housing assistance is usually the lower amount of these two formulas:

  • [The payment standard in your area] – [30% of your family’s adjusted income]
  • [The gross rent for the unit] – [30% of your family’s adjusted income]

In other words, the amount you get reduced from the rent is either the standard rent (as decided by the government for your area) minus the most you can afford for housing (which is deemed to be 30% of your income) OR the actual gross rent minus 30% of your income. 

income restricted apartmentsSection 8 Rental Assistance: Example Calculation 

Let’s say the unit you’re looking at is $1,000 a month. The government says the standard rate for the unit is $950 a month. And, 30% of your adjusted income is $400.

Your housing assistance would be:

  • the lower amount between the actual rent ($1,000) and the payment standard assigned by the government ($950) = $950
  • take the above number and subtract your 30% of income ($400)

Therefore, your assistance amount would be $550. Then you’d owe $400 of rent each month to the landlord.

This can be a fantastic program for those that are really having trouble making ends meet.

Do You Qualify?

To qualify for Section 8 housing, your family’s income must not exceed 50% of the median income for the county you choose to live in. 

In fact, 75% of the Section 8 vouchers are handed out to those that have an income that’s 30% or less of the median income for your area. In other words, the lower your income, the better chance you have at qualifying and being selected.

How Do You Apply?

To apply for a Section 8 voucher, simply contact the local public housing agency in your area. They can get you started on the process.

Is Income Restricted Housing Right for You?

If you believe you earn far less than the median income in your area, then why not check out HUD’s website and find out for sure? If you do land in the income range for income restricted housing or Section 8 housing, then why not apply?

Sure, it may be somewhat humbling, but…

  • this is your opportunity to save a few hundred dollars a month!
  • a chance for you to actually stash away some savings for a rainy day!
  • and, perhaps you could even put some money away for retirement!
  • or, better yet, put money away for your kids’ college education!!!

Just think about that for a second. A few hundred dollars a month can absolutely do all of the above, and it’s certainly worth just digging in a little bit to see if you could get a break on rent in your area. This could change your life.

Money Save Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

Related posts