Glossary of Terms
Affordable housing: Housing is affordable if the people living there pay no more than 30% of their income toward the rent or mortgage. Affordability depends on income.
Low-income rental housing: Housing that requires subsidies for production or for occupants or both to make it affordable to low and very low-income households.
Affordable ownership housing: Market-rate, unsubsidized housing for moderate-income households, particularly first-time buyers, and subsidized ownership housing for low- and moderate-income homebuyers.
Moderate-income: A household with an income from 80% to 95% of the local area median income.
Low-income: A household with an income from 50% to 80% of the local area median income.
Very low-income: A four-person household with an income less than 50% of the local area median income.
Extremely low-income: A household with an income less than 30% of the local area median income.
Housing wage: The amount a full-time worker must earn to afford a two-bedroom rental at the fair market rent while spending no more than 30% of his or her salary.
Area median income (AMI): The middle income by Metropolitan Statistical Area (MSA) and by county. AMI depends on family size. The Department of Housing and Urban Development (HUD) issues a listing of the AMIs each year. The AMI is used to determine the eligibility of applicants for both federally and locally funded programs.
Fair market rents (FMR): An affordability indicator set by HUD for most areas at their 40th percentile rent, are those for which or below which 40% of an area’s standard quality homes rent.
Income limits: Family income limits established by law for admission into low- and moderate-income housing projects or to qualify for rent supplement assistance. Income limits are based on family size and geographic location.
Subsidy: Government grant to the sponsor to reduce the cost of one or more housing components (land, labor, material, financing) in order to lower the cost to the occupant