What is affordable housing? The real definition and who it is for
By Fair Shot Housing editorial teamUpdated 5 min read
Summary
Affordable housing is housing whose cost fits your income: by the federal housing department's standard, rent or mortgage plus utilities of no more than 30% of what you earn. Most affordable housing programs also have an income limit, set as a share of the middle income in your area, often 50%, 60% or 80%.
In this article
What is affordable housing? It is housing whose cost fits your income. HUD, the federal housing department, uses 30% of income as the standard. If your rent or mortgage plus utilities is 30% of your income or less, your housing is affordable for you. So the word compares cost with income. It doesn't just mean a low price.
Most affordable housing programs also have income limits, the most a household can earn and still qualify. These are set as a share of the area median income, the middle income in your area: half of households earn more and half earn less.
What does "affordable" mean to HUD?
To HUD, housing is affordable when it costs no more than 30% of your income, counting rent or mortgage and utilities. HUD's 2025 report to Congress calls a household that pays more than that cost-burdened, and one that pays more than 50% severely cost-burdened.
Many renters pay more. In 2023, 26.0% of renter households paid more than half their income for housing, by HUD's count. The Census Bureau found that 49.7% of renter households paid more than 30% in 2023.
Is affordable housing the same as cheap housing?
No. The 30% test compares cost with income, so the same rent can be affordable for one household and too much for another. HUD's 2026 income limits, which took effect May 1, 2026, show how much the numbers change from one area to another for a household of four:
| Area | Median family income | Very low income limit (50%) | Low income limit (80%) | Rent and utilities at 30% of the 50% limit, per month |
|---|---|---|---|---|
| Dallas, Texas area | $121,100 | $60,550 | $96,900 | $1,514 |
| Boston, Massachusetts area | $164,600 | $85,700 | $137,100 | $2,143 |
So for a family of four at the 50% limit, 30% of income covers about $1,514 a month in rent and utilities in the Dallas area. In the Boston area, it covers about $2,143.
HUD doesn't always set these limits at exactly half or 80% of the median. It raises them where rents are high compared with incomes, as its method paper explains. So Dallas's $60,550 is exactly half its median, but Boston's $85,700 is about 52% of its median.
Who is affordable housing for?
Most affordable housing is for households earning up to a set share of the area median income, usually 50%, 60% or 80%, depending on the program. HUD works out a median family income for every county and metro area each year and publishes income limits from it.
The law sets three income levels:
- Low income: no more than 80% of the area median.
- Very low income: no more than 50%.
- Extremely low income: no more than HUD's 30% limit. HUD sets it at 60% of the 50% limit, or the federal poverty guideline if that is higher, but never more than the 50% limit.
HUD's main rent programs use these levels:
- Public housing: apartments the local housing office owns and rents out.
- Section 8 buildings: privately owned buildings where the government pays part of the rent. If you move out, you lose the lower rent.
- Section 8 vouchers: a voucher pays part of your rent on an apartment you choose, and it can usually move with you.
- Section 202 buildings for older adults and Section 811 buildings for people with disabilities.
Our guides to area median income, 2026 income limits and what counts as low income show the numbers.
How do programs use the 30% rule?
Programs use the 30% rule in two different ways, and the difference matters for your rent.
| Kind of housing | How the 30% rule works |
|---|---|
| Public housing, Section 8 buildings and Section 8 vouchers | Your rent is about 30% of your own income after deductions, so it goes up when you earn more and down when you earn less. With a voucher, you also pay any rent plus utilities above the voucher limit, officially the payment standard: the most rent and utilities together can cost in your area while you still pay only about 30% of your income. When you first rent a home with it, what you pay can't be more than 40% of your monthly income after deductions. |
| Tax credit buildings, built with a federal tax break | The rent is a set amount: by law, rent plus utilities can be no more than 30% of the apartment's income limit. It doesn't change with your own pay, so you need enough income to cover it. |
Your income after deductions is your adjusted income: your yearly income minus set amounts, such as one for each child. HUD's public housing page explains them.
What do "subsidized" and "naturally affordable" mean?
"Subsidized" housing means a government program pays part of the rent, as in public housing, Section 8 buildings and vouchers. "Naturally affordable" housing is a private rental cheap enough for a household with a low income without any help.
There isn't enough of either. In 2023, 6.8 million renter households, 14.7% of all renters, got help with rent from the government, HUD's report found. It also found only 59 affordable rentals not already taken by higher-income renters for every 100 renter households with very low incomes. For households with extremely low incomes, there were 38 for every 100.
Cities and programs use other names too. Read our guides to income-restricted apartments, subsidized housing, below-market-rate housing and workforce housing.
How do you find affordable housing near you?
Add up your household's yearly income before taxes, and count everyone who will live with you.
Check your income against the limits with our qualify check, or look up your area's HUD limits.
See what you can apply for now on our listings page. It shows these kinds of listing:
- lotteries, where applications are put in a random order;
- waitlists, lines you join now for an apartment that comes free later;
- first come listings, where the first people to apply and qualify get the apartments.
Our waitlists page shows the Section 8 and public housing lists, and HUD's contact page lists every local housing office.
Call buildings that keep their own waitlists. Our buildings page lists them by state, and HUD's tax credit database gives the addresses of tax credit buildings.
Apply on the listing's official page. A housing office can't charge you to apply for a Section 8 voucher or public housing, so never pay anyone to put you on those lists.
If you want to buy, see our guide to affordable homes for sale.
This is general information, not legal or financial advice. Each building and housing office sets its own rules and income limits, so confirm the details with the one you apply to.
Frequently asked questions
What percent of income should housing cost?
No more than 30%, by the federal housing department's standard, counting rent or mortgage plus utilities. HUD calls a household that pays more than 30% cost-burdened, and one that pays more than 50% severely cost-burdened.
Is affordable housing only for people with very low incomes?
No. Many programs take households earning up to 80% of the area median income, and some go higher. New York City's HomeFirst down payment loan, for example, is for buyers earning up to 120%.
Is a Section 8 voucher affordable housing?
Yes. A Section 8 voucher pays part of the rent on an apartment you choose. You usually pay about 30% of your income after deductions, and the local housing office pays your landlord the rest. This holds as long as the rent plus utilities is within the voucher limit. That limit is the most a home can cost in your area while you pay only about 30%.
Can you buy affordable housing, or is it only rentals?
You can buy. Cities, land trusts and nonprofits sell homes below market price to buyers under an income limit, and state agencies offer down payment help. Each home or program sets its own price and income limits, so read the listing.
Who decides whether a home is affordable?
The building or housing office that runs it. HUD publishes income limits for every area, and each building or office picks the share it uses, such as 50%, 60% or 80%. So the same word can mean different dollar amounts in different places.
Sources
- HUD: Worst Case Housing Needs, 2025 Report to Congress
- HUD USER: Worst Case Housing Needs 2025 report, full text (PDF)
- U.S. Census Bureau: Nearly Half of Renter Households Are Cost-Burdened
- HUD USER: Income limits
- HUD USER: Methodology for determining FY 2026 Section 8 income limits
- HUD USER: FY 2026 Section 8 income limits spreadsheet
- HUD: Housing Choice Voucher program for tenants
- 24 CFR 982.508: Maximum family share at initial occupancy
- NYC HPD: HomeFirst Down Payment Assistance Program
- HUD: Public housing
- 26 U.S. Code 42(g): Low-income housing credit, qualified low-income housing project
- HUD USER: Low-Income Housing Tax Credit property level data
- HUD: Public housing agency contact information
See open housing lotteries and their deadlinesLook up housing words in the glossary
See what you qualify for
Answer a few questions about your household. We compare your answers with the income limit and rules on each open listing.