While “low income senior housing” may sound unappealing to some people, the reality is that affordable housing can be a boon for seniors who find themselves spending the lion’s share of their retirement income on rent. And unless you are disabled or require long-term medical care in a nursing facility, neither Medicare nor Medicaid will pay for senior housing on an ongoing basis.
Following are several ways to reduce your senior housing expense so you’ll have more money to enjoy your later years.
Option 1: Low Income Housing Tax Credit (LIHTC). This federally funded program has been available to the public since 1997. While not specifically targeted towards seniors, the goal is to ensure there is enough low-income housing to meet the needs of the population. According to HUD the (U.S. Department of Housing and Urban Development), which created the LIHTC, an average of 105,000 units were made available each year from 1995 to 2011.
It’s up to the building owner to choose how many units to set aside for low-income residents. For instance, an owner may opt to set aside 20 percent of a building’s units for those whose income is less than half of the median household income in the area. The other option is to set aside 40 percent of the total units for those whose income is less than 60 percent of the local median household income. Dwellings that meet the reasonable, safe accommodations requirement and other qualifying rules may then apply for the tax credit.
Owners accept the rent amount specified by HUD to participate in the program and be eligible for tax credits. If a senior meets the HUD income criteria, they can research their local area for dwellings that are HUD-approved and offer the housing tax credit.
Option 2: Housing Choice Voucher Program. More commonly known as Section 8, this low-income option, also offered through HUD, enables low-income residents to rent “safe and reasonable” apartments or other accommodations. Under Section 8, landlords accept 30 percent of the family’s or individual’s income as a full rent payment.
In terms of income guidelines, individuals generally must have an income that doesn’t exceed 50 percent of the median income in their local area (county or metropolitan area). This allows the program to function effectively in any location. Section 8 is not contingent on age (i.e., it is not a senior-specific low-income program).
Option 3: Section 202. Also funded through HUD, the Section 202 Supportive Housing Program is specifically geared towards seniors: adults aged 62 plus who meet the “very low income” requirement. It’s the only U.S. affordable housing program offered exclusively for seniors. In effect for more than half a century, Section 202 currently funds over a quarter million units for the elderly.
Section 202 is similar in structure to Section 8. Participants pay 30 percent of their income for rent, with the HUD subsidy making up the balance.
A perk of Section 202: This housing option may offer combined features of both independent living and assisted living. For example, some Section 202 housing developments provide assistance with activities of daily living (ADL), along with meals and transportation; others might offer free blood pressure screenings and social events, such as “movie night.” For seniors who are noise sensitive, Section 202 housing will also be quieter than general subsidized housing, because the only children around will be visiting grandkids!
An applicant selected for the Section 202 program signs a lease and a tenant rental assistance contract, verifying their income. Since this may change over time, the contract states that a senior agrees to be re-certified annually to ensure they are still eligible to receive assistance. If their income should exceed the very low-income limit, they will no longer receive a rental subsidy — however, they can remain in Section 202 housing as long as they wish.
Obviously, both later life housing and health care are crucial issues for seniors and their loved ones. To help you make the best decisions, please review this comprehensive guide to paying for health care and senior living as you and your family plan for current and future health and housing needs.
About the Author:
Amara Rose is a personal and business coach with a broad background in health and positive aging. She writes widely about senior housing, elder health and nutrition, lifelong learning and the spiritual dimension of aging. Contact her via email@example.com.