Housing GSO: HRA Greensboro Affordable Housing Plan

AFFORDABLE HOUSING GLOSSARY

Low-Income Housing Tax Credit (LIHTC): The Low-Income Housing Tax Credit Program is a federal program that provides a dollar-for-dollar tax credit to support the development of affordable rental housing. The LIHTC program distributes federal income tax credits to developers through states’ individual Housing Finance Agencies (HFA), which determine which projects receive tax credits under their federal allocation. There are two general types of credits that can be awarded, 9% credits and 4% credits. 9% credits are higher-value credits that cover a greater percentage of projects’ development costs (generally 70% to 80%), and are awarded on a competitive basis. 4% credits are lower-value credits that cover a lower percentage of projects’ development costs (generally 30% to 40%), and are generally awarded to any projects that meet specific programmatic requirements and are financially feasible. 4% credits are usually paired with tax-exempt bond financing to help offset the lower subsidy amounts. Naturally Occurring Affordable Housing (NOAH): Naturally occurring affordable housing is housing that is priced by market forces at levels that are affordable to low-income residents. Housing is traditionally considered affordable if total housing costs (rent or mortgage, plus utilities) represent no more than 30% of the occupying household’s income. NOAH housing often makes up a significant portion of a jurisdiction’s affordable housing stock, in addition to publicly-subsidized housing. “Not in My Backyard” (NIMBY): NIMBY is a term used to describe residents’ opposition to new development, including denser multifamily housing and affordable housing, in their neighborhood or community. Opposing residents can sometimes block development, reduce the size of proposed projects, or slow the development process.

North Carolina Housing Finance Agency (NCHFA): NCHFA is a state agency that helps finance affordable housing by operating or administering a range of programs, including the sale of tax-exempt bonds, LIHTC, HOME, and North Carolina’s Housing Trust Fund.

Project-Based Section 8 Vouchers: The Project-Based Section 8 voucher program, as it is now known, was established in 1974. Under this program, HUD enters into Housing Assistance Payments (HAP) contracts with private owners to provide affordable housing to low-income tenants. Under the contracts, tenants pay 30% of their adjusted monthly income for rent and utilities, and HUD pays the owner the difference between the tenants’ payment and the agreed- upon rent. New residents of Project-Based Section 8 units must have incomes of at or below 80% of AMI, and 40% must have incomes at or below 30% of AMI. Public Housing: Public housing is a type of affordable housing that has been traditionally owned by a local government agency, generally a designated public housing authority. HUD provides federal aid to these agencies to operate housing for residents, who pay rents that they can afford. In the United States today, there are approximately 1.2 million households living in public housing units, managed by 3,300 housing authorities (HUD Public Housing Program Office).

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