A property qualified under Section 42 must allocate a specific percentage of units for low-income residents whose income does not exceed 60% of the area’s median income.

This program enforces strict maintenance standards, requiring regular inspections to ensure cleanliness and proper functioning of appliances, as well as checks to confirm that carbon monoxide and fire alarms are operational and that fire extinguishers are present. Moreover, the overall safety of the property must be validated.

Properties that do not pass these inspections risk losing their tax credit.

What is the Difference Between Section 42 and Section 8?

Both Section 42 and Section 8 aim to assist individuals with limited income, but their structures differ significantly. Section 8 is a government-subsidized program, meaning the benefits are funded by the government, while Section 42 is not funded by government subsidies.

Section 42 provides property owners with tax credits in exchange for maintaining a designated number of affordable units over a specified period.

While Section 42 establishes a cap on the rent a tenant must pay, including utilities, which remains the tenant’s responsibility, Section 8 bases a tenant’s rent on 30% of their income, with the federal government covering the remainder.

Another key distinction is that, although both programs consider the area’s median income for eligibility, the application processes differ. For Section 8, applicants go through a PHA office, whereas Section 42 applications are submitted directly to the property manager or owner.

What is the Income Limit for Section 42?

The income limits for Section 42, similar to those for Section 8, are based on the area’s median income, which can differ from one locality to another. The median income serves as a midpoint, with half of families earning more and the other half earning less. The HUD offers a tool to assist you in finding the latest median income figures for your area.

To access the tool, click HERE. Upon loading the page, select whether you need median income data for an individual or a family, choose your state and area, and then view the list of median income information for your selected area.

How to Find a Section 42 Apartment?

If you’re on the lookout for a Section 42 apartment, there are several methods you can use. One straightforward approach is to utilize online rental platforms such as Zillow.

Just enter your desired area and type “Section 42” in the keyword search box to find listings of available properties. Alternatively, you can use the LIHTC Database provided by the HUD. To explore the database, click HERE.

After the page loads, select your preferences on the left side of the screen and then choose your state at the bottom. Once you have input this information, you should see a comprehensive list of properties available under the Section 42 program.

How do I Apply for Section 42?

When applying for Section 42, the property manager or owner may provide you with a form to complete or may direct you to an online application. These applications typically require personal information about you and your household members, including:

• Full, legal name
• Gender
• Social Security number
• Date of birth
• Citizenship status

Important

It is crucial to adhere to the application instructions and ensure that all parts are thoroughly completed. An incomplete application or misinformation may lead to rejection.

You will also need to submit various documents. Keep in mind that requirements may differ by property, so it’s best to contact them beforehand to understand their specific needs.

Generally, the required documents may include:

• Income
• Standard wages
• Social Security
• Pensions
• Alimony
• Child Support
• Bank verifications
• Savings
• Financial assets
• Family size

What to do After Applying for Section 42

After submitting your application to the property manager/owner, you will need to wait for your application to be processed.

Unlike Section 8, most Section 42 properties typically do not maintain waiting lists. However, if yours does and you find yourself on it, be sure to keep track of essential information, such as where you applied, your position on the list, and any confirmation numbers you receive.

Generally, wait times for LIHTC properties can range from a few months to rarely exceeding a year. Stay in touch with the property manager/owner, keeping them informed of any updates to your contact information.