Understanding the Section 42 Affordable Housing Tax Credit Program
Residency
The Section 42 housing program refers to that section of the Internal Revenue Tax Code which provides tax credits to investors who build affordable housing. Investors recieve a reduction in their tax liability in return for providing affordable housing to people with fixed or lower income. The Section 42 Program is not a subsidized rental program.
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What does Section 42 mean to you?
While owners and investors in an apartment building benefit through tax credits, as a renter you benefit by paying lower monthly rents. The program is especially suited for those who may be on a fixed income. The Section 42 program allows you to live in distinctive, quality environments at extremely affordable rates. To qualify for such an apartment, however, you must be “income eligible”.

How do you learn if you qualify for an income eligible apartment?
 The community manager and or leasing staff helps you complete forms requiring information about your income, family size and financial assets. It can take several weeks to determine your eligibility for the program.

If you income qualify, does that mean you automatically receive an apartment?
No. It just means that we will acknowledge that you qualify for an income eligible, tax credit apartment home. Your application will be subject to further standard screening policies which will include a credit check, criminal background screening and prior landlord references.

What are maximum income levels, and what do they mean?
Income levels are determined by the U.S. Department of Housing and Urban Development (HUD) for each county. There is a maximum allowable income for each income-eligible apartment home. If your total household income is above these levels you will not qualify to live in a Section 42 income restricted unit.

How your maximum income level is determined?
Your maximum income level is based on the number of people in your household and gross annual income. Your gross annual income will be a sum of your fixed income and income from your assets. Some examples of income are:
  • Social Security
  • Commisions, Tips
  • Unemployment Compensation
  • Pensions
  • Annuities
  • Employment Wages and Benefits
  • Retirement
  • Monetary Gifts
  • Income from Assests and Investments
Income earned (Interest) from your assets is also calculated when determining your household income.
Some examples of assets would be:
  • Cash Kept at Home
  • Checking and Savings Accounts
  • Certificates of Deposits
  • Investment Accounts
  • Savings Plans
  • IRAs
  • Equity in Real Estate and Rental Property
  • Life Insurance Policies
  • Lump Sum Receipts
  • Stocks and Bonds
  • Safety Deposit Boxes
  • Revocable Trusts
Why must you verify income and family size every year?
Each year you must recertify your income and family size before you are offered a new lease. The community manager will help you through this recertification process. If you exceed the maximum income level by more than 140%, you may not qualify to continue living in your tax credit apartment home.

Can someone else live with me?
Your apartment home is being leased to you and the people who were identified on the rental application. The Section 42 guidelines require that you immediately notify management in writing if there are any changes in your family composition. You may be required to complete the certification process again based on this new information.

What is Compliance?
Compliance means that you fit all guidelines necessary to live in a Section 42 apartment home.
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How do I apply?
Our professional staff will provide you with the necessary forms and be happy to assist you in the application process.
information@sacredheartsenior.com
3627 S. Kinnickinnic Ave. St. Francis, WI 53235
Phone: (414) 481-8680 | Fax: (414) 481-8690