How to Qualify and Apply for Affordable Housing in Austin, Texas

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Contributor, Benzinga
October 10, 2023

Affordable housing can make the dream of living in Austin — the Live Music Capital of the World — a reality. For renters and potential homebuyers, it’s important to understand homeownership program requirements before applying. Affordable housing can help you dance to the beat of your own drum and have you listening to one of your favorite bands in the heart of the city in no time.

How Affordable Housing in Austin Works

The federal government and the city of Austin have multiple affordable housing programs and tools to offset the expensive cost of living in a metropolitan area. The Housing Authority City of the City of Austin (HACA) provides assistance for public and subsidized housing, with about 1,800 housing units such as apartments available. HACA administers a waiting list for the Housing Choice Voucher (HCV) program (formerly Section 8) and 18 waiting lists for its Project-Based Rental Assistance (PBRA), Low Income Housing Tax Credit (LIHTC) and Public Housing properties. You start the pre-application process on HACA’s website.

Qualifications for Affordable Housing in Austin

The income and rent limits differ depending on the household size of Austinites. For example, a two-person household with a median family income of 50% has an income limit of $44,150 while a five-person household with a 50% median household income is $59,600. To be eligible, you must have less than 80% of the set Austin median family income (MFI). The family income chart for Austin will show where you stand. In addition to income regulations, qualifications typically include a minimum credit score of 620.

How to Find Low-Income Housing in Austin

A referral list of housing services in Austin addresses a wide range of needs from homebuyer assistance to short-term housing assistance and housing rehabilitation.

  • Homebuyer assistance can help you cover your down payment and closing costs. Housing agencies like the Texas Department of Housing and Community Affairs provide below-market interest rates for mortgages to make homeownership more attainable. To qualify for many first-time homebuyer benefits, you cannot have owned a home within the last three years.
  • Short-term housing assistance resources range from providing resources and shelter for the homeless to offering transitional housing. Transitional housing supports homeless people who cannot currently afford long-term housing.
  • Public assisted housing and rent subsidies are owned or overseen by the state government. The housing is typically open to single parents, families and people who meet the income requirements. Rent subsidies cover private rental housing under Section 8.
  • Rent subsidization is tied to income. Rent subsidies may be available if you earn no more than 80% of the area-related median income, are over 60 years old or qualify for handicapped assistance programs.
  • Housing and credit counseling empowers you to achieve a higher level of financial literacy. The non-profit agency Clearpoint Credit Counseling Solutions offers housing and credit counseling that’s free to members of the community.
  • Housing rehabilitation in Austin includes rehabilitation resources such as the Texas Veterans Land Board. The board can offer loans up to $25,000 to veterans for housing repairs. The United States Department of Agriculture (USDA) has single-family housing repair loans as well as applicable grants.

Loan and Down Payment Assistance Programs

Long-term housing loans and down payment assistance programs can prove beneficial. Down payment and loan assistance programs lower the initial costs related to buying a home while providing lower interest rates. Before purchasing a home, reach out to private lenders as well as government-backed programs to know your housing options.

City of Austin Down Payment Assistance Program

The City of Austin Down Payment Assistance Program gives first-time homebuyers favorable rates such as a loan with a 0% interest to ease the burden related to downpayment and closing costs. The property must be used as the homeowner’s primary residence to qualify.

Texas State Affordable Housing Corporation

The Texas State Affordable Housing Corporation works with home buyers and renters interested in obtaining housing. Assistance ranges from 30-year fixed-rate mortgage loans to grants and down payment assistance.

The Texas Department of Housing and Community Affairs

The department helps Texans achieve the goal of becoming a homebuyer by offering flexible downpayment assistance programs and a mortgage tax credit program.

Private Lenders

Private lenders provide loans such as conventional loans and Federal Housing Administration (FHA) loans, which are backed by the federal government. Private lenders work with the government to lend to low and medium-level households. Private lenders offer informative tools like resource center, mortgage calculators and relevant news to educate potential borrowers.

How to Buy an Affordable House in Austin

Before purchasing a home, determine how much you are able to afford. Top private lenders and programs usually provide useful tools such as mortgage calculators to assist with the learning curve. Eligibility requirements differ depending on the housing program. After determining your eligibility, decide who you would like to have as your lender. Many programs and corporations provide lists of approved lenders. Next, find a realtor who is familiar with affordable housing. The process of buying an affordable house in Austin includes multiple steps that can be made simpler with the right team of experts at your side.

How to Rent an Affordable House in Austin

Locating and renting an affordable house in Austin requires research and patience. First, understand how much you are able to spend per month on rent. It’s recommended to spend less than 30% of what you earn per month on housing. Consider where you would like to live and what type of house you want to rent. You can choose from available apartments, townhomes, and duplexes. Check the Affordable Housing Online Search Tool (AHOST) to navigate the current market and manage your expectations. AHOST is managed by the Housing and Planning Department to integrate comprehensive planning, zoning and displacement prevention, which includes affordable housing program delivery.

Build Your Nest: Affordable Housing in Austin

Finding the ideal nest might feel like a distant dream in Austin, but the proper team of professionals and resources can help turn it into a reality. When searching for home loans or personal loans, have a few clear goals in mind and be flexible. Allowing for flexibility and expectation management expedites the process when you interact with loan and downpayment assistance programs.

Frequently Asked Questions

Q

Who qualifies for affordable housing in Austin?

A

To qualify for affordable housing opportunities to assist with affordable homeownership in Austin, you must earn less than 80% of the set Austin median family income (MFI).

Q

Where to live in Austin that is affordable?

A

Consider moving to the suburbs or slightly out of the city center for more affordable pricing. Housing prices in locations such as Windsor Hills and Thorndale offer potential for first-time home buyers and families looking to settle down.

Q

How much can I afford for a house in Austin?

A

What you can afford depends on a collection of factors such as your income and savings. Most landlords expect you to spend less than 30% of your monthly income on rent.

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