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What Are Income Restricted Apartments?

Last modified: Sep 29, 2022

Income restricted apartments provide an affordable living option for families with a low gross income. This article explains everything you need to know, including eligibility.


Are you currently on a low income? If so, then you may be eligible for an income-restricted apartment. So what are income-restricted apartments? These are apartments specifically designed for low-income families, couples, and single individuals.  

However, to gain access to these apartments, you need to meet the criteria and complete the necessary steps. In this article, you will learn key information about this affordable housing option, including how to apply for it in your area.    

What Are Income Restricted Apartments?

Firstly, you need to be aware that income-restricted housing is not another term for income-based apartments. The main difference between the two is the income limit. 

To qualify for income-restricted housing, you must earn 60% or less than the median income for the local area. For income-based housing, your income must be 50% or less than the median income. As such, more people can qualify for income-based apartments than income-restricted apartments.         

Typically, income-based housing is planned developments that are privately owned, specifically for low or middle-income tenants. These are funded by local and national government agencies or nonprofit organizations. This is part of a U.S Department and Urban Development (HUD) affordable housing initiative.                

In contrast, income-based apartments are owned by individual landlords. They need to meet certain criteria to offer this type of housing, and it must be renovated to HUD requirements. Income-based housing can include different property types such as: 

  • Townhouses 
  • Duplexes
  • Single-family homes 

The Story Behind Affordable Housing  

The story of affordable housing in the U.S began in 1937 when the “U.S. Housing Act” was established to address the needs of low-income individuals. During this time, the nation’s housing was of particularly poor quality. For example, it was common for homes to have no hot running water, and properties, in general, were dilapidated.             

To combat this issue, Housing and Urban Development (HUD) were created as a cabinet-level agency to deal with housing. This succeeded both the National Housing Agency and the Home Finance Agency.      

However, a problem arose when the cost of operating public housing overtook the revenue from resident rental payments. By 1960, HUD provided subsidies to Public Housing Agencies to ensure that the difference could be managed.      

Then, the Brook Amendment was passed in 1960 to ensure that a resident would not be expected to pay more than 25% of their total income, which was later raised to the 30% standard that still exists today.          

Over the years, the structures for affordable housing have changed considerably, often in conjunction with issues that impacted the national economy and civil rights movements. Yet, despite the challenges, affordable housing developers continue to build, rehabilitate, and preserve properties for those living on low incomes.   

How Can I Get an Apartment With Low Income?

If you need to get a low-income apartment, you first need to check that your income fits the criteria. Next, you may wonder whether income-restricted apartments are low quality. This isn't the case; but, it’s important to note that you won’t have preferences when choosing your apartment. You will need to take whatever is available, regardless of the fixtures or the design. Therefore, there can be certain discrepancies in the quality of different income-restricted units. However, they must all meet the same requirements laid out by HUD.    

 Additionally, you might need to consider your credit. The government won’t check your credit score to determine whether your credit is at the right level. However, private landlords can run a credit check. They might also set up a minimum score you need to meet to qualify.   

However, this bar usually isn’t as high for low-income renters. As such, you won’t need to worry too much about the credit check, although it may impact whether you need to pay a deposit to move into the accommodation.          

How Do Income-Based Apartments Calculate Rent?

Your local PHA will have its own procedures when calculating the rent for income-based apartments. Typically, if you calculate 30% of your monthly adjusted gross income, this will be how much you will be expected to pay or your TTP (total tenant payment).    

In some cases, your TTP can equal just 10% of your monthly income. If you have an extremely low income or a low minimum rent, this will be the case. When you know how much your gross income is, you should research the income rules specific to your area.      

While your TTP can be lower than 30% of your gross income, there is a minimum level of rent that the PHA must charge you. This can be no lower than the minimum monthly rent that the PHA establishes.     

There are exemptions from the minimum rent requirement in extreme circumstances; including:      

  • Death in the family   
  • Need for a reasonable accommodation due to a family member’s disability
  • Income decreases due to loss of employment or changing employment circumstances

Who Qualifies for income-restricted Housing? 

If you want to know: what income-restricted apartments are, you need to understand who will qualify for income-restricted housing. As mentioned, the criteria is based specifically on an individual’s income compared with the area’s median income.     

Since it is based on local income standards, the total income you can earn and still be eligible will differ depending on location. In some areas, the income threshold could be significantly lower or higher. That’s why you must research to find out whether you are eligible before you apply. The information required is readily available from government sources online.       

Additionally, other requirements can impact whether you qualify for income-restricted housing. Be aware that in numerous cities, income-restricted housing is limited to those with an income marked as being “very low.” This is due to the low level of availability for housing that fits into this bracket.   

How to Find and Apply for income-restricted Housing— Step By Step  

To find and apply for income-restricted housing, you will first need to check eligibility. There may be specific requirements in your area; however, typically, the criteria is established by HUD. For example, you can not have outstanding consumer debt that amounts to more than 60% of your income. You will also be required to pass a background check.     

Once you have checked your eligibility, you need to contact your local housing authority. In some cases, you can apply online. However, usually, you will need to meet with a HA representative.       

Next, you will need to complete a written application. It’s crucial to provide information on everyone living in the apartment when applying for low-income apartments. Taking your application directly to the HA can ensure it is processed more quickly.  

You will need to gather any documents that support your application. This could include:

  • Tax returns
  • Birth certificates 
  • Marriage certificates
  • Bank statements
  • Pay stubs 

Once you have completed your application, you will need to wait for a decision from the HA. If they decide that you are not eligible, they will explain why. If you are deemed eligible, you will be added to a waiting list. This can take months or years, depending on the demand for public housing in your local area.               

When a unit is available, you can then sign your lease and pay a security deposit. Be aware that income-restricted apartments typically won’t allow you to choose where you live; it depends on availability. 

Based on income, apartments provide you with the option of staying as long as you live according to the lease requirements. However, if your income rises significantly, the HA may decide you can afford to pay for private housing, and you could be asked to leave.  


We hope this answers the question: what are income-restricted apartments. In summary,  these homes are specifically for individuals who need affordable housing and meet the required criteria. 

Unfortunately, the need for affordable housing is constantly growing. Currently, there are only 37 affordable housing units available for every 100 Americans with extremely low incomes. Therefore, the Federal Housing Assistance serves only 25% of individuals who qualify for the program.

Overall, income-restricted apartments continue to help those with limited income, making it easier to afford a higher standard of living. 

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