Affordable housing is sought after by individuals who are low income or those who rely on government assistance for housing costs. Investors who wish to provide affordable housing to these individuals will need to meet specific criteria for doing so. Property must be in good condition, safe and must meet the needs of the community.

Purchasing cheap homes to provide affordable housing opportunities for individuals does not have to be done through government programs. Investors may select to purchase low cost properties, renovate them and then offer low rent tenant opportunities. Investors working with or not working with the government for housing needs should keep the following in mind:

1. Determine the need for housing for low income within the area, particularly paying attention to current rents to determine profit potential.

2. Work with local real estate agents to locate cheap homes for sale .

3. Seek out local government officials, politicians and activists to establish an affordable housing program whenever possible.

Action Steps
The best contacts and resources to help you get it done

Obtain government tax breaks for low income housing programs

Investors may obtain a variety of tax breaks and other affordable housing resources. Low cost loans, deep tax discounts and other incentives are offered through several government agencies that will enable investors to establish low income housing opportunities. These tax breaks and other incentives are widely available.

I recommend: Find assistance for a variety of government organizations. Government housing programs require the assistance of local investors to make them successful. The Internal Revenue Service (IRS) offers the Low Income Housing Tax Credit (LIHTC) program to investors who are interested in low income projects. The program extends for 10 years' worth of credits. The U.S. Department of Housing and Urban Development (HUD) provides a detailed resource for landlords able to provide Section 8 Vouchers to individuals. The resource offers guidance, tools, tax information and a list of public housing agencies to help investors make the proper decisions.

Establish subsidized housing voucher programs through local and national assistance

Subsidized government housing is owned by private investors in many situations. These properties must meet specific qualifications under HUD guidelines, yet owners can find local resources to assist them.

I recommend: Locate HUD housing information and housing requirements through local government agencies maintaining them. For example, investors planning investments in Michigan can find informational resources through the Michigan State Housing Development Authority. To learn the legal requirements for investing in public housing, consider Justia, a resource that is able to point out local law requirements.

Choose qualified, inexpensive low income housing for investment

Providing cheap homes for rent can only be done when investors can purchase property affordably. Properties must also be considered closely for their ability to meet specific guidelines of local housing authorities. For this reason, investors need well-trained professionals able to provide them with detailed local information and property locating.

I recommend: Buy homes for cheap by investing the time working with a qualified professional to help locate them. Use the National Association of Realtors to help locate agents able to provide public and private housing qualified properties. Experts in the local industry will be able to help investors locate properties that will qualify and are still inexpensive. Use RentLaw to find potential properties and to network with other investors. Additionally, the company provides laws required for investment. Match the requirements for voucher programs with available housing realtors provide.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Private and public assisted living is a necessary tool, especially in a housing downturn. When property values are low, many people who have never invested in property before become investors and landlords. One should network with other investors when making the most of affordable housing.

One of the touchiest subjects in investment properties is that of housing for low income tenants. Many investors consider having a portion of their portfolio dedicated to cheap homes to be a waste of time and money. But it doesn’t have to be either.

In fact, there are many supplemental government programs available that make offering an affordable housing program a sound investment. With tax credits, tax-exempt bonds, special financing, and other opportunities available to investors in low income housing, the personal financial risk can be greatly minimized. And if you’re able to be certified to accept subsidized government housing vouchers, you’re almost guaranteed constant 100% occupancy due to the waiting lists in many areas for such properties.

When considering adding low income housing programs to your real estate investment portfolio, among the key points to consider are:

1. The need for affordable housing in your community.

2. The availability of tax breaks for affordable housing resources.

3. Your property’s ability to qualify as government housing.

Action Steps
The best contacts and resources to help you get it done

Find tax credits and tax-exempt bonds available for low income housing in your area

The government loves to promote affordable housing whenever it can do so. However, there are often limits on the amount of subsidized housing that can be in any area. So many state and local governments offer tax breaks to investors who make the rent on their properties appropriate for those tenants who need cheap homes.

I recommend: Affordable Housing Finance is a magazine dedicated to financing housing for low income residents. They offer a state-by-state list of contact information for available tax credits and tax-exempt bonds. Fannie Mae offers information on a wide variety of financing and tax credit options on their website as well.

Offer your property to tenants using subsidized housing vouchers if possible

In many urban areas, there is a shortage of properties open to those using subsidized housing, or Section 8, vouchers. These programs therefore have long waiting lists for prospective tenants. By opening your property to these tenants, you can work towards having close to 100% occupancy due to the sheer demand for quality properties that accept Section 8 vouchers.

I recommend: The Section 8 program is administered nationally by the U.S. Department of Housing & Urban Development (HUD). The HUD website offers a section for landlords, chock-full of information on accepting Section 8 vouchers for your low income housing.

Assess the need for affordable housing in your community

In most urban areas, there is no question as to the need for low income housing. Many families struggle to make their monthly rent and are always looking for cheap homes for rent. However, in some suburban or rural communities, the need is less great and other investors may have already met this.

I recommend: HUDUser.org offers huge sets of data on affordable housing across the country. This can help determine appropriate rental rates as well as the quantity of need in your area.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Most investors offering low income housing expect a decent amount of tenant turnover. Make sure you have designed your property to turn over quickly with the minimum necessary between tenant rehabilitation, such as carpet cleaning and designer painting.

Affordable housing is a concern for many, especially in larger cities where there are not many opportunities for lower income people to find cheap homes or quality apartments. Most income housing programs can help families find affordable housing in their area. For people who work in these programs, affordable housing is a complicated job that does require some background knowledge and training.

To begin affordable housing management education and training, it might be best to start with government organizations that regulate affordable housing. Overall there are many options even for busy individuals, such as:

1. Online information that explains different aspects of low income housing programs.

2. Half- or full-day seminars that walk you through tax information and other important topics.

3. Organizations that offer additional benefits to members, including educational materials and training opportunities.

Action Steps
The best contacts and resources to help you get it done

Find information and educational materials for government housing online

There are many resources online that provide information on affordable housing management, from specific tax credit instructions to the broader picture of affordable housing availability throughout the country. You will also want to make sure you know and understand state and national regulations for training, as well as management issues.

I recommend: The Government Innovators Network provides case studies and reviews on the topic of affordable housing management. The U.S. Department of Housing and Human Development (HUD) provides an online library that covers many topics in affordable housing.

Train in multiple areas of affordable housing program management

Besides knowing how to manage properties, there are many other components of affordable housing that can catch you off guard unless you have the right training. There are many specific topics offered as housing management training courses. While not all are required to manage affordable housing, the courses are helpful to most.

I recommend: The National Center for Healthy Housing provides training courses on how to effectively build and maintain safe homes while following state and national safety standards. Neighbor Works provides both required and additional training courses for property management, that include testing and certification online. HUD offers training in complying with its HOME affordable housing program.

Explore affordable housing resources offered by professional organizations

The best way to find additional educational resources for affordable housing management is to join associations and organizations dedicated to providing subsidized housing for individuals and families that meet their needs. These organizations can also offer perks for members, including reduced prices on training and educational materials.

I recommend: National Affordable Housing Management Association (NAHMA) can put you in touch with other housing managers as well as provide resources for education and training in the field. Regional associations, such as the Michigan Affordable Housing Management Association (MAHMA), also provide many training sessions that can teach you a different aspect of managing affordable housing. There are many organizations that address the education needs of affordable housing managers. For a long list, check out HUD's website.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  There are many additional resources on housing for low income people available through local and state government programs that may be worthwhile to explore.