Application Process
The first step in the process is for a project owner to submit an application to a state
authority, which will consider the application competitively. The application will include
estimates of the expected cost of the project and a commitment to comply with either of the
following conditions, known as "set-asides":
- At least 20% or more of the residential units in the development are both rent
restricted and occupied by individuals whose income is 50% or less of the area
median gross income.
- At least 40% or more of the residential units in the development are both rent
restricted and occupied by individuals whose income is 60% or less of the area median
gross income.
Typically, the project owner will agree to a higher percentage of low income usage than
these minimums, up to 100%. Low income tenants can be charged a maximum rent of 30% of the
maximum eligible income, which is 60% of the area's median income adjusted for household
size as determined by HUD. There are no limits on the rents that can be charged to tenants
who are not low income but live in the same project.