Glossary of Terms
Affordable Housing – Housing for which the occupants are paying no more than 30 percent of their income for gross housing costs, including utilities. Local policy often seeks to serve renters up to 60% or 80% of Area Median Income, owners up to 100% or 120% of Area Median Income.
Area Median Income – A benchmark which divides income distribution in a given area into two equal parts: one-half earn above this amount and one-half below. Affordable housing eligibility is generally based on income as compared to this benchmark. Area median income figures are calculated by household size by HUD on annual basis for all metropolitan regions of the country and rural areas of states. Housing policy will often focus on households at various AMI levels (e.g. 30%, 50%, 60%, 80%, 100%, 120% of AMI).
Moderate Income Households – Defined by HUD as those households whose incomes are near the area’s median (80 to 120 percent of the median). This measure can be adjusted to account for family size. US Census Bureau defines as 80% of median.
Workforce Housing – Housing for those who earn too much to qualify for most affordable housing programs yet cannot afford the average market rate. The meaning of this term can vary by market and by context but often refers to households between 60 to 120 percent of Area Median Income (AMI), renters and owners.
Assisted Housing – Any housing development which has received some form of public subsidy from local, state or federal sources, typically to support the creation of affordable housing units.
Community Land Trust – Community land trusts are nonprofit, community-based organizations designed to ensure community stewardship of land. Community land trusts can be used for many types of development (including commercial and retail) but are primarily used to ensure long-term housing affordability.
Density Bonus – An agreement to allow developers to increase the number of units beyond that which would normally be allowed under a specific zoning regulation, in exchange for setting aside a specific share of units affordable to people with low or moderate incomes.
Down Payment Assistance – A “catch-all” term for a variety of programs designed to help homebuyers purchase a home with fewer out-of-pocket costs. These can include free housing grants, funds towards closing costs, forgivable loans, and 0% non-forgivable loans.
Fair Market Rent (FMR) – The maximum rent which can be charged on a unit to meet either a 60% of AMI or 80% of AMI income maximum for an affordable unit. FMRs are determined annually by HUD and primarily used to determine payment standard amounts for housing assistance voucher programs and other housing assistance payment programs.
Homelessness – When individuals lack a fixed, regular, and adequate nighttime residence.