Frequently Asked Questions

What is the difference between Section 8, Section 42 and Market Rate?

Section 8
 
Section 42
 
Market Rate
         
  • Income Eligibility Required
  • Income levels determined by HUD in each county
  • Low monthly rents determined by HUD
  • Rent based on 30% of your adjusted gross monthly income
  • Medical deductions
 
  • Income Eligibility Required
  • Income levels determined by HUD in each county
  • Low monthly rents determined by HUD
 
  • No income eligibility required
  • Income levels are not applicable
  • Market-value rents 

What is Section 42 Housing?
Section 42 refers to part of the U.S. tax code that provides tax credits to investors who build affordable housing. Section 42 of the Internal Revenue Code was established as part of the Tax Reform Act of 1986. Congress intended that the tax credit would encourage development of affordable housing by construction of new projects or the rehabilitation of existing facilities.

What does Section 42 mean to you?
While owners and investors in an apartment building benefit through tax credits, as a renter you benefit by paying lower monthly rents. The program is especially suited for those who may be on a fixed income. At a Horizon managed property, Section 42 allows you to live in distinctive, quality environments at extremely affordable rates. To qualify for such an apartment, however, you must be “income eligible”.

How do you learn if you qualify for an income eligible apartment?
The Horizon apartment manager helps you complete forms requiring information about your income, assets and the number of people in your household. It takes three to four weeks to determine your eligibility. Horizon provides you with notification of your eligibility. An acceptance or denial letter is mailed directly to your home address.

If you income qualify, does that mean you automatically get an apartment?
No. It just means that Horizon acknowledges that you qualify for an income eligible, tax credit apartment home. Your application may be subject to further screening policies.

What are maximum income levels, and what do they mean?
Income levels are determined by the U.S. Department of Housing and Urban Development for each county. There is a maximum allowable income for each income-eligible apartment home. Rents are set by HUD based on median county income and their guidelines.

How your maximum income is level determined?
Your maximum income level is based on the number of people in your household and gross annual income. Your gross annual income will be a sum of your fixed income and income from your assets. Income counted is your fixed income such as:

  • Social Security
  • Employment Wages and Benefits
  • Commission, Tips
  • Unemployment Compensation
  • Pensions
  • Annuities
  • Retirement
  • Monetary gifts
  • Income from Assets & Investments

Income earned from your assets is also calculated when determining your household income. Examples of assets would be:

  • Cash at Home
  • Checking and Savings Accounts
  • Certificated of Deposits
  • Investment Accounts
  • Savings Plans
  • IRAs
  • Equity in Real Estate & Rental Property
  • Life Insurance Policies
  • Lump Sum Receipts
  • Stocks & Bonds
  • Safety Deposit Boxes
  • Revocable Trusts

Why must you verify income every year?

Each year you must recertify your income and family size before you are offered a new lease. The Horizon compliance team helps you through this recertification process. If you exceed the maximum income level by more than 140%, you may not qualify to continue living in your tax credit apartment home.

How is your income-eligibility verification woven into the Horizon application process?
It is one of the early steps of the paperwork in the process of obtaining your new apartment home requiring full financial disclosure. The Horizon Management Services team will help you every step of the way.

What is Section 8 Housing Assistance
Section 8 is a federal program that provides housing assistance to low-income renters. The assistance is in the form of rental subsidies, reducing the monthly rent you must pay. To qualify for Section 8, you must have low income (below 50% of the area median income). If you qualify, your rent payment is based on 30% of your adjusted gross monthly income. Section 8 funds will pay anything above 30%, up to a set limit. The program is administered by your local public housing authority. You can visit the following Web site to identify the housing authority that administers Section 8 in your area: www.affordablehousingonline.com