A big concern among older adults is the cost of housing. In fact, seniors living on their own spend an average of $16,880 per year on housing costs. Considering the average amount that seniors receive from Social Security is $17,532 per year, there isn’t much money left for other expenses. While most seniors that are spending $16,880 per year on housing aren’t living on Social Security alone, there is a population of seniors that aren’t as fortunate.
To help ease the burden on seniors, there are several government programs that provide financial assistance and support for housing. To find all the options currently available, make sure to start an online search today. If you need some ideas to get you started, here are five programs that are worth your consideration.
1. Single Family Housing Repair Loans and Grants
The Single Family Housing Repair Loans and Grants program offers:
- Loans for low-income homeowners to repair, improve, or modernize their homes, and;
- Grants for low-income seniors above the age of 62 to remove health and safety hazards.
Loans are available for up to $40,000 and grants for up to $10,000. Moreover, you are able to combine loans and grants for a maximum of $50,000. Applicants have 20 years to pay their loan, which has a one percent fixed interest rate. For grants, applicants only need to repay their funding if the property is sold within three years of application.
If you wish to apply for a loan or grant, make sure to contact your local Rural Development office.
2. Section 8 Housing Choice Voucher Program
The Section 8 Housing Choice Voucher program is a government-funded program that helps low-income families, seniors, and disabled individuals afford safe and clean housing. The program is administered by local public housing agencies (PHAs), who work with participating landlords to provide voucher holders with housing options.
To be eligible for the program, applicants must meet income guidelines and other criteria set by their local PHA. Since the demand for housing assistance usually exceeds the resources of a PHA, applicants should be aware that they will be put on a waiting list upon approval.
Once issued, voucher holders can choose whatever rental unit they want. However, the local PHA will inspect the unit to ensure it meets program requirements and the rent is reasonable. After the unit is approved, the voucher holders must pay 30 percent of its monthly gross income on rent and utilities.
3. Low-Income Housing Tax Credit
The Low-Income Housing Tax Credit (LIHTC) provides subsidies for the creation, rehabilitation, or acquisition of affordable rental properties, making it one of the most effective tools for creating affordable housing. Since its inception in 1986, the program has since helped create, rehabilitate, or acquire over two million units for affordable housing.
The credit is available to developers and owners of rental property who agree to set aside a certain number of units for low- and moderate-income households. As such, housing subsidized by LIHTC is required to charge reduced rent to these households for a minimum of 15 years. Fortunately, most agreements extend that requirement to at least 30 years.
If you are a senior in need of an affordable rental property, make sure to search online for available LIHTC properties in your area.
4. Section 202 Supportive Housing for the Elderly Program
Much like the LIHTC, the Section 202 Supportive Housing for the Elderly program provides funding to the construction, rehabilitation, or acquisition of affordable housing. This time, the affordable housing must be for low-income seniors. This means it must provide seniors with all the support — including cleaning, cooking, and transportation — needed to live independently.
To be eligible for funding, the U.S. Department of Housing and Urban Development requires applicants:
- Be a private nonprofit organization;
- Aren’t controlled by or receive the majority of funding from a public body or tribe;
- Rent to low-income households that include at least one senior age 62 or above, and;
- Provide reduced rent to low-income seniors for a minimum of 40 years.
5. Home Equity Conversion Mortgage
The Home Equity Conversion Mortgage (HECM) is a government-sponsored reverse mortgage that allows seniors to convert the equity in their homes into cash. The amount that seniors can borrow is determined by the appraised value of the home up to a limit of $970,800. While interest does accumulate over time, it is at a lower rate than typical mortgages. Furthermore, the loan doesn’t need to paid until the senior sells the home, moves out, or passes away.
To qualify for a HECM, the borrower must:
- Be 62 or older;
- Own the house in its entirety or have a small balance on their mortgage;
- Live in the property
- Have paid all their federal debt, if applicable, and;
- Meet with a HECM counselor for a consumer information session.