It’s hardly news that Austin is in the grips of an affordability crisis, with rental and home prices escalating and wages failing to keep up. The amount renters pay in Austin has nearly doubled in 10 years, and the median rent is now $1,349 per month. The median price of a single-family house in Austin reached a staggering $395,000 last year.
But before you throw in the towel, move to Kyle, and put up with an hour-long commute to and from work every day, first try familiarizing yourself with the dizzying number of affordable housing and down payment assistance programs available to Austin residents. Don’t assume these programs aren’t for you. You might be surprised by how much someone can make and still qualify for affordable housing or down payment assistance.
To save you a bit of time, Curbed Austin has compiled a list of affordable housing programs, from ones that target the very poor or homeless to families and individuals with middle-class incomes. But first, a warning: Many—but not all—of these programs involve some red tape, phone calling, e-mailing, paperwork, or wait lists. Get ready to roll up those sleeves.
First, you need to know this: Your annual household income as it’s stated on your tax return. This number will determine eligibility for every affordable housing program.
Next, take a look at this chart of the Median Family Income for the Austin area. Some affordable housing programs target households making 80 percent or less of the median family income, which in 2019 was $95,900 for a four-person household, a number the federal government resets every summer. Some programs set a lower limit, such as 60 percent. When possible, this guide will make clear which income levels are relevant. The chart lists the 2019 median family income for households of one to eight people and from 20 percent to 100 percent of median family income for each group.
Buying a home
While most affordable housing programs for homebuyers target people earning 80 percent of median family income or below, know that the sweet spot is 60 to 80 percent of median family income. If you make too far below 60 percent median family income levels, it will also be challenging to qualify for the home-purchase loan.
The Mueller Affordable Homes Program
Want to buy a home in Central Austin but can’t afford it? Then check out the Mueller Affordable Homes Program, which offers eligible buyers the opportunity to purchase a new or resale home in the popular Mueller subdivision in East Austin.
The Mueller homes in the affordable program are priced well below market value, selling in the high $100,000s to low $200,000s, compared to the $611,500 median sales price for traditional buyers in that neighborhood, according to Austin Board of Realtors data. One catch: You can’t turn around and flip these homes—there are caps on how much profit you can derive.
To apply, read these eligibility criteria carefully. If you’re interested in a new-construction home, contact one of the on-site builders, such as David Weekley or CalAtlantic. These homes are designed for households who earn 80 percent or below the median family income. You must have a decent credit score and qualify for the loan, just as you would with a conventional home purchase.
Income-restricted homes and condos
The city has incentivized housing developers to set aside some units for affordable housing in certain new housing projects, particularly condominiums. Most of these programs target those earning 80 percent of the median family income or less. The city’s list of eligible condo projects and the estimated price of each is worth reviewing. A caveat: Many of these affordable units are as small as 484 square feet, so they aren’t ideal for families. One exception is Canopy at Westgate, which is selling one-and-two-bedroom homes for $160,000 to $193,500.
Habitat for Humanity
Although this program is familiar to many, it doesn’t have the miles-long waiting lists of other Austin affordable housing programs. Habitat for Humanity helps build brand-new homes for families that fit a unique set of criteria. Beyond certain income limits, Habitat for Humanity also considers your current housing situation and your ability to provide “sweat equity” toward their new home. It focuses on people who make 80 percent of the median family income or below, but potential buyers should know that it’s not an overnight process. Habitat for Humanity says it can take 18 months from initial inquiry to move-in. One interesting trend: In 2019, Habitat announced it was shifting its focus to multi-family housing, although it is still building single-family homes at this time.
Loans and down payment assistance programs
One of the least talked-about but potentially most helpful tools in the affordable housing toolbox are the many down payment assistance programs offered to homebuyers. These programs are perfect for those who have good credit scores and decent income but not enough savings to cover their entire down payment and closing costs. And it is surprisingly easy to qualify—the income limits in these programs tend to be much higher than those for affordable housing programs.
Here are a few of the most popular programs:
Texas State Affordable Housing Corporation
This state entity offers low-interest loans and down payment assistance for up to 5 percent of the purchase price to people who meet the eligibility requirements. Take this handy quiz to figure out if you are eligible. (When I took the quiz as a pretend first-time homebuyer, it said that as long as I made under about $95,000 a year, I was eligible.)
The Texas Department of Housing and Community Affairs
This state department has two down payment assistance programs, one for first-time homebuyers and one for buyers who have owned a home before. Study this chart to understand whether you fit under the income limits. According to the chart, households with an annual income up to $132,440 could qualify for down payment assistance in Travis County.
City of Austin Down Payment Assistance Program
For eligible homeowners, the city offers a forgivable, zero percent interest loan of up to $40,000 to cover a down payment. The catch is the home has to be in the city limits and the purchase price can’t exceed $280,000. In a city where the median home price is $395,000, that narrows the list of eligible homes considerably. Still, this may work nicely for pockets of north and southeast Austin.
Finally, there are several loan programs for military veterans, doctors, firefighters, teachers and other professionals that may allow you to borrow up to 100 percent of the loan and require no down payment. It’s important if you’re interested in no-down-payment loans to talk to a lender who is familiar with them. Some DPA programs have their own lists of preferred lenders who have undergone training. Or talk to a realtor to get a lender recommendation.
Renting a home
Income-restricted apartment units
Thanks in part to the city’s efforts to incentivize developers to create affordable housing, there are a surprising number of under-the-radar affordable housing units available to renters throughout Austin—hey just aren’t heavily advertised. Some are even located inside glamorous newer apartments in sought-after locations, such as Bell South Lamar or 7East in East Austin.
But figuring out which apartments have affordable units available and are accepting new applications takes some work. The good news is there are efforts underway to make this process easier to navigate. The city of Austin is working on a website in which renters can plug in income information and household size and get a list of income-restricted apartments for which they qualify. Qualifying renters still have to contact apartment managers to find out if any affordable units are available.
The Austin Tenants Council has also put together a handy guide on affordable housing programs for renters in the Austin area. One of the best parts about this guide is it includes a list of apartments that offer income-restricted units to renters. Just bear in mind that this report only comes out every few years, and some information may be outdated.
The list of nonprofits dedicated to either building affordable housing or helping people find affordable housing is long, and each has its own specialty. For instance, some specialize in helping homeless people, while others focus on helping domestic violence victims find housing. Familiarize yourself with this Housing Works of Austin page for more information.
Easily one of the biggest and most well-known nonprofit providers of affordable housing in Austin is Foundation Communities. They run 21 different apartment communities, located throughout the area, that offer housing primarily for people making 60 percent or less than the median family income, which is about $56,760 for a family of four. Their apartments are well-maintained and most were built within the last 10 years. The amount of rent charged varies with income.
Many Foundation Communities apartments have waiting lists, and those wait lists are often closed. To find out which communities have wait list openings and what their tenant selection criteria is, study their list of Austin-area apartments. Each has their own tenant selection criteria. You may also want to call the apartment and ask about waitlist policies and procedures.
The Mueller Affordable Homes program also has a rental component for the apartment complexes at Mueller. To qualify, you must make 60 percent or below the median family income.
Housing Choice Voucher Program (formerly known as Section 8)
This federally supported program is run by the Housing Authority of the City of Austin. Low-income families who receive a voucher pay between 30 and 40 percent of their income toward rent, and the federal government pays the rest. This allows voucher recipients to shop for market-rate apartments or income-restricted apartments. To be eligible, you must make less than 50 percent of the median family income.
There is a very long waiting list to get a voucher, and it is currently closed. When the Housing Authority decides to open it up again, it holds a lottery to determine who can get on the waiting list. When the list was last opened, in 2018, there were 16,000 applications for 2,000 spots.
The housing authority also runs Austin’s 16 public housing communities, which hold a total of 1,619 units. Residents pay about 30 percent of their income toward rent. The housing authority is in the process of converting the program that used to be called public housing to the Project Based Rental Assistance Program, which allows the authority to make improvements to the properties. There are 16 separate wait lists for each housing development and 9,497 applicants on those wait lists. You can learn more about eligibility on the HACA site.
Lilly Rockwell is a native Austinite, a licensed realtor, and a former journalist who most recently worked for the Austin American-Statesman.