What Is Section 42?

Section 42 is the legal code which provides government tax credits to builders who choose to develop affordable rental housing. Section 42 isn't just beneficial for builders, however. The tax code also establishes an affordable housing program for renters.

What's the difference between Section 8 and Section 42?

Section 8 and Section 42 offer very similar housing opportunities for people with low income. However, there are a few big differences between the two.

Rent under Section 8 is determined by the tenant's income and the government pays the landlord the difference. Rent under Section 42 is based on the area's median income. Builders are receiving a tax benefit from the government so they can offer some units at a reduced rate (as part of the agreement for the tax benefit).

Finally, you need to go through a whole application process for Section 8. In Section 42, you just need to show that you earn a certain percentage of the area's median income.

Benefits of living in Section 42 housing

Affordable housing programs are extremely helpful. Beyond the helping hand with rent each month, however, there are added benefits to living in a Section 42 apartment.

• Might be centrally located
• Developers agree to keep the rent-restricted, income-restricted and the units in safe, livable and clean conditions
• Often includes the cost of utilities

Who is eligible for Section 42?

The primary factor for eligibility for housing assistance under Section 42 is income. Income eligibility varies by location, and you can find out more by contacting your local Public Housing Agency.

However, the threshold for eligibility is typically some percentage of an area's median income — perhaps 30, 50, 60 or even 80 percent. Beyond the primary income eligibility factor, some locales include eligibility requirements around student/non-student household status, as well.

Additional resources

• How Do You Qualify for Section 8 Apartments?
• What is Section 42 Housing?
• What's the Difference Between Section 8 and Section 42 Housing?
• What Is Section 8?
• How To Find Section 8 Apartments

The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional financial or legal advice as they may deem it necessary.

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