3.2Subsidized Housing in General

The federal and state governments operate programs that provide subsidized housing assistance to eligible low income families, the elderly, people who are homeless, and people with disabilities.¹ Most financial assistance for low income housing comes from the United States Department of Housing and Urban Development (HUD).²

In most cases, a tenant’s rent is based on a percentage of the tenant’s income and results in a “tenant portion” and a “government portion” of the total rent. See 42 USC 1437a(a). The three primary exceptions to this general rule are: (1) the Low Income Housing Tax Credit Program under which below market rents are based on a percentage of the area median income; (2) multifamily properties on which HUD insures the mortgage and rent is based on the project’s operating budget; and (3) Rural Housing without Housing Assistance (rural loan program), where “basic” and “note” rents are based on a property’s interest rate and the property’s operating, management, and maintenance expenses.

A.Federal and State Law Requirements Are Cumulative

Landlord-tenant cases are subject to the cumulative effect of federal and state law. In all cases, landlords must comply with the requirements of federal and state law as those laws pertain to the landlord-tenant issues involved in each case. See Ypsilanti Housing Comm’n v O’Day, 240 Mich App 621, 631 (2000). See also 24 CFR 247.6(a). See Public Housing Occupancy Guidebook³ (June 2003), p 203; HUD Handbook 4350.3: Occupancy Requirements of Subsidized Multifamily Housing Programs (May 2003, revised with CHG-2, effective June 2007, and CHG-3, effective June 2009) (hereafter Handbook 4350.3), p 8-10; Housing Choice Voucher Guidebook 7420.10G⁴ (April 2001), p 15-3; and MFH Asset Management Handbook HB-2-3560 (USDA, Feb 2005, revised Dec 2008), Attachment 6-E, p 5.

“A tenant may rely on State or local law governing eviction procedures where such law provides the tenant procedural rights which are in addition to those provided by [applicable federal law].” 24 CFR 247.6(c). See also Ypsilanti Housing Comm’n, 240 Mich App at 631. For similar guidelines with regard to various subsidized housing programs, see Handbook 4350.3, pp 6-4, 8-16.

B.General Categories of Subsidized Housing

In general, housing assistance is categorized as either tenant-based or project-based:

1.Tenant-Based Subsidized Housing

In tenant-based subsidized housing, the subsidy is assigned to a person or family, and the eligible person or family may select suitable housing for which the landlord accepts rental assistance. 42 USC 1437f(f)(7); 24 CFR 982.1(b)(1)-(2). See also 42 USC 1437a(b)(3). Section 8 Housing Choice Vouchers are an example of tenant-based housing assistance. See 42 USC 1437f(o). Tenant-based assistance is portable; that is, it travels with the individual to whom the assistance is awarded. See 42 USC 1437f(f)(7); 24 CFR 982.1(b)(2).

2.Project-Based Subsidized Housing

In project-based subsidized housing, the subsidy is attached to the housing structure itself. 42 USC 1437f(f)(6); 24 CFR 982.1(b)(1). Project-based assistance includes multifamily property or select units within a multifamily property (usually HUD project-based Section 8 assistance), HUD Public Housing, privately owned multifamily developments with HUD contracts, and the Section 515 Rural Housing Program. See e.g., Handbook 4350.3, pp 1-6, 1-7.