Investing in affordable housing may be appealing to multifamily investors for several reasons. There is consistent demand for these properties, and they are often viewed as recession-proof.

At the same time, they give investors an opportunity to invest in social impact and/or the well-being of their own community.

However, the regulations and financing mechanisms involved in investing in affordable housing can be complicated, and often differ from state to state or city to city.

Understanding the basics of affordable housing is necessary before navigating the complexities of specific projects.

To that point, we will consider a few important affordable housing terms before reviewing the basics of Low-Income Housing Tax Credits, Section 8, HAP Contracts, and loan programs.

What is Affordable Housing?

Affordable housing provides housing for members of society with limited income.

Property owners receive tax credits if they use a percentage of their property as affordable housing. Property renters also receive government assistance in paying their rent every month. There are five groups of people that typically in need of affordable

With affordable housing comes an opportunity for real estate investors to help increase the supply of affordable housing while potentially receiving positive tax benefits and risk-adjusted returns.