Housing Assistance in Tennessee

Tennessee structures its housing assistance programs like most states in the nation. Most forms of rental assistance come through Department of Housing and Urban Development (HUD) programs such as public housing and Section 8. The state and local agencies also provide benefits to prospective homeowners, ranging from down-payment assistance to access to loans with favorable terms.

Function

• Most housing assistance strives to meet the nationally accepted standard of housing affordability. As the U.S. Census Bureau explains, consensus among housing experts is that a household should not commit more than 30 percent of its income to the cost of housing. When a family cannot afford the market rates for housing in their area, they often devote a disproportionate segment of their budget to their rent or mortgage and utilities. This can result in families struggling to pay for other necessities, such as food and transportation.

Programs

• In Tennessee, the most common forms of rental assistance are HUD's public housing and Section 8 Housing Choice Voucher programs. Public housing consists of government-owned low-rent units where eligible families generally pay no more than 30 percent of their income for rent. With a Section 8 subsidy, families can secure private market housing, but HUD pays the portion of their rent that exceeds 30 to 40 percent of their income. Local housing authorities throughout Tennessee administer the public housing program. Local housing authorities also operate the Section 8 program, however the Tennessee Housing Development Agency (THDA) notes that it runs the program in 75 Tennessee counties, as of November 2010.

  While some housing authorities, such as Chattanooga's, offer homeownership assistance, a majority of it comes form THDA. For instance, THDA provides foreclosure prevention options, homeownership education classes, assistance with down payments and closing costs and low-interest rate loans. THDA also provides emergency housing assistance to the homeless and other vulnerable groups.

Eligibility

• In most cases, Tennessee's housing assistance programs use income as the main qualifying criterion. For example, the public housing program restricts access to families with household income at or below 80 percent of their area's median. The Section 8 program sets the cap at 50 percent, according to HUD's Housing Choice Voucher fact sheet. These limits apply not only in Tennessee, but nationwide. While the income thresholds for other programs vary, THDA and other entities tend to defer to HUD's limits, although they might use different percentages of median income.

Geography

• HUD sets the income limits it uses to assess program eligibility annually. These limits vary by location. For example, a family of five in the Nashville metropolitan area is at 50 percent of their area's median income if they earn $35,250 a year, as of 2010. That number drops to $30,200 in Chattanooga and $25,900 in Johnson City.

Need

• The relationship between Tennessee rental prices and the 30-percent affordability standard underscores the need for housing assistance programs. The 2010 fair market rent on a two-bedroom statewide is $701; in the Nashville metro, it is $807, according to the National Low Income Housing Coalition. A full-time minimum wage worker in Tennessee can only afford $377 in rent, based on the 2010 minimum wage of $7.25 an hour. To afford fair marker rent on a two-bedroom at the state average, a full-time earner needs to take in $13.47 an hour. In Nashville, he needs to earn $15.52.