For many seniors, finding affordable housing is critical — and often frustrating. People can end up spending the lion's share of their limited retirement income on rent. Contrary to popular belief, unless someone is disabled or requires long-term care in a nursing home or memory care facility, neither Medicare nor Medicaid will pay for senior housing on an ongoing basis.
However, there are several government services for seniors that can reduce housing costs significantly. Here are three Housing and Urban Development (HUD) programs with a real silver lining:
Option 1: Low Income Housing Tax Credit (LIHTC). This federally-funded program has been available to the public since 1986. While not specifically targeted towards senior living, the goal is to ensure there is enough low-income housing to meet the needs of the population. According to HUD, 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. Owners accept the rent amount specified by HUD to participate in the program and to be eligible for tax credits. A senior who meets the HUD income criteria can research their local area for HUD-approved dwellings that offer the housing tax credit.
Option 2: Housing Choice Voucher Program. More commonly known as Section 8, this affordable housing option 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, your individual income must not exceed 50 percent of the median income in the 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 HUD-funded, the Section 202 Supportive Housing Program is specifically geared towards seniors: adults aged 62 and older who meet the "very low income" requirement. It's the only government-subsidized affordable housing program offered exclusively for seniors. In effect for more than half a century, Section 202 currently funds over a quarter million senior living units.
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 sensitive to noise, 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 income. Since income 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 your income should exceed the very low-income limit, you will no longer receive a rental subsidy — however, you can remain in Section 202 housing for as long as you wish.