Affordable-housing lotteries and LIHTC apartments: how to apply

An affordable-housing lottery draws rent-restricted apartments among all applications received before the deadline; in New York you apply through NYC Housing Connect, online or by mail.² To qualify, your income must fall within each building’s range, measured as a percentage of area median incomearea median income (AMI)The area median income (AMI) is the median family income of an area, which HUD computes every year for each metropolitan area and county. Housing programs use it as the yardstick: under the federal rule, a family is low-income when it earns no more than 80% of its area's median income and very low-income when it earns no more than 50%, adjusted for family size. State down payment assistance programs and Section 8 vouchers publish their limits as a percentage of AMI, so the same salary can qualify in one county and not in the next.See the full definitionClose.¹ Many of these buildings use the federal LIHTC tax credit, which caps their rent and prohibits them from turning you down for having a Section 8 voucherHousing Choice Voucher (Section 8)The Housing Choice Voucher, the program almost everyone calls Section 8, is the country's largest federal rental assistance. HUD pays rental subsidies so eligible families can afford decent, safe and sanitary housing. Local public housing agencies administer it with HUD funds. The family finds its own home on the private market; if the agency approves the unit and the tenancy, it contracts with the owner to pay part of the rent, and the family pays the rest. Waiting lists are usually long and open for limited periods.See the full definitionClose.^{5 5} This guide explains how they work, who qualifies and how to apply without paying anyone.

Of the unit's income limit, the most gross rent a restricted LIHTC unit can charge

30%⁵

Of area median, the income limit in LIHTC's 40–60 test

60%⁵

The minimum age to apply through NYC Housing Connect

18 years¹

What affordable housing is and how it is measured

In New York, HPD explains that affordable housing is based on your household’s percentage of area median income (AMI), set by the federal government every year. Housing is considered affordable if it costs about one-third or less of household income and is regulated so the rent can’t go up dramatically over time.¹

That means each building publishes which incomes it is for: for example, households up to a certain percentage of AMI. Your income has to fit that range; you can be left out for earning too little, not only too much.¹ HUD’s income limits for your county and family size give you an idea: look them up in places or with the income limits tool.

How the NYC Housing Connect lottery works

Each building is announced with its deadline. You can apply online through NYC Housing Connect or by mail, following the advertisement’s directions; paper applications are returned by regular mail only. Applications after the deadline are not considered. After the deadline, applications are selected for review through a lottery.²

From application to review

1. 1. Read the advertisement

   Before the deadline

   Check each unit's income range and household size.¹

2. 2. Apply online or by mail

   By the deadline

   Online through NYC Housing Connect, or on paper by regular mail.²

3. 3. The lottery orders applications

   After the deadline

   Applications are selected for review at random.²

4. 4. They ask for your papers

   If you are selected for review

   Income, assets and the building's selection criteria.¹

To be eligible you must be 18 and have household income within each opportunity’s range. There are also asset limits and tenant selection criteria.¹ HPD’s page to find affordable housing links Housing Connect, the application guides, Ready to Rent, which offers free one-on-one financial counseling, and affordable re-rentals.⁴

Before you apply: read each advertisement with your own numbers

An advertisement is not one offer but several: each unit size has its own income range and its own rent. Before you apply, write down three things about your household. First, how many people will live with you, counting children, because the income range depends on household size. Second, your household’s total income: everyone who will live in the unit and earns money counts, not only you. Third, your savings and other assets, because there are asset limits as well as income limits.¹

Then compare. If your income falls below the bottom of a unit’s range, you will not qualify for that unit even if the rent looks low to you; if it falls above the top, you are over the limit. Look for the unit sizes whose range includes your income and your household size, and apply to those. Applying to a unit you can’t qualify for only uses up the time you have before each deadline, and late applications are not considered.²

Rent is the other number to check. In affordable housing, the rent is set so it costs about one-third or less of the household income it is designed for, not of your own income.¹ If your income is near the bottom of a range, that rent can take a bigger share of what you earn. The how much rent can I afford calculator shows what share of your income a given rent would take.

Finally, keep your papers current while you wait. If you are selected for review, you will have to show your income, your assets and that you meet the building’s tenant selection criteria.¹ Having recent pay stubs, tax returns and bank statements ready in one folder makes that step faster, and keeping a copy of each application and its confirmation number lets you answer any question about it. If your income, your household or your phone number changes while you wait, update every application you have open, so the building can reach you and judge you on your real situation.

What a LIHTC apartment is

LIHTC is the federal low-income housing tax credit. Building owners get it in exchange for keeping some of their units rent-restricted for low-income people. The law gives three tests, and the project elects one:⁵

The three income tests of a LIHTC project

At least 20% of units

20–50 test

• Rent-restricted and for people with incomes up to 50% of area median.⁵

At least 40% of units

40–60 test

• Rent-restricted and for people with incomes up to 60% of area median.⁵

At least 40% of units

Average income

• Each unit has its own limit: 20% to 80% of area median, in steps of 10.⁵

In all three, a restricted unit's gross rent can't exceed 30% of its income limit.⁵

The gross rent that counts toward that cap includes the utility allowance and excludes what a Section 8 voucher or similar rental assistance pays.⁵ So in a LIHTC building the rent is set by the unit’s limit, not by your income: if your income is very low, that rent can still be high for you, and a voucher helps cover the gap.

If you have a Section 8 voucher

The LIHTC law prohibits the building from refusing to rent to you because you have a Section 8 voucher, and lets people who meet the building’s income limit enforce that rule in state court.⁵ HUD tells voucher holders the same: LIHTC properties are required to accept vouchers, and its resource locator shows the ones near you.⁶

Having a voucher doesn’t skip the other requirements: you still have to meet the building’s income limit and selection criteria. Some landlords charge application fees, and some housing agencies require voucher holders to pay the deposit on their own.⁶ The guide on how to apply for a Section 8 voucher explains the search term and lease approval.

Example with real numbers

How a LIHTC unit's rent is set

An example in words; the building's advertisement has the real figures.

The unit's income limit

A percentage of area median, for example 60%⁵

Maximum gross rent

30% of that limit, utility allowance included⁵

If you have a voucher

The voucher doesn't count as gross rent; it helps pay your share⁵

What you pay

The unit's rent, or your share if you have a voucher

Compare the unit's rent with your income before you apply.

Run it with your numbersHow much rent can I afford?

Outside New York: where to look

Every city and state announces its lotteries and buildings its own way. To find LIHTC buildings, use HUD’s locator;⁶ also ask your housing agency and your state’s housing agency. In places, your county’s rent page brings together HUD’s fair market rent, housing agencies and the rent-help programs we checked, for example Los Angeles County’s.

• Mistake: Applying after the deadline.

  Instead: Write down each lottery's deadline; late applications are not considered.²

• Mistake: Applying everywhere without checking the income range.

  Instead: Check each building's range: you can be left out for earning too little or too much.¹

• Mistake: Paying someone who promises a spot in the lottery.

  Instead: Apply yourself or with a Housing Ambassador, who helps for free.³

• Mistake: Not mentioning your voucher.

  Instead: A LIHTC building can't turn you down for having it.⁵

• Mistake: Arriving at the review without papers.

  Instead: Have your income and assets ready; there are limits and selection criteria.¹

Where to get free help

A HUD-approved housing counselorHUD-approved housing counselorA HUD-approved housing counselor works at an agency HUD has approved to provide housing counseling: independent, expert advice customized to your situation about buying a home, renting, a missed mortgage payment, a foreclosure or credit problems. The agencies usually charge little or nothing; many serve in Spanish and offer the homebuyer education course several assistance programs require. They are not lenders or real estate agents and sell you nothing. Your county page lists the official agencies with phone numbers.See the full definitionClose can help for free or at low cost with your budget and applications; the guide to HUD-approved housing counselors explains how to find one. In New York, Ready to Rent offers free one-on-one financial counseling.⁴ If a LIHTC building refuses you for having a voucher, free legal aid can review your case.

If this is you

You have a Section 8 voucher

Look for LIHTC buildings: they can't turn you down for the voucher.⁵

Your income is very low

LIHTC rent is set by the unit; a voucher or a unit with a lower limit may help.⁵

You live in New York

Apply through Housing Connect before the deadline; a Housing Ambassador helps for free.³

You have no credit history

Ask about each building's selection criteria before you apply.¹

What to do this week

1. Add up your household income for the last 12 months and how many people live with you.¹
2. Look for open lotteries in your city and write down each deadline.²
3. Look for LIHTC buildings in HUD’s locator.⁶
4. Gather your pay stubs, tax returns and bank statements.¹
5. If you have a voucher, say so when you apply to a LIHTC building.⁵