Affordable Housing

Updated May 17, 2026

Affordable housing refers to housing that is deemed affordable to those with a median household income, as rated by national or local government standards. Generally, housing is considered affordable if a household spends no more than 30% of its gross income on housing costs, including utilities.

Key Aspects

• Income-Based Definitions: Affordability is typically tied to the Area Median Income (AMI) (AMI) for a specific region. Different income tiers (e.g., extremely low, very low, low, moderate income) have corresponding affordability thresholds.
• Housing Cost Burden: Households spending more than 30% of their income on housing are considered "cost-burdened," while those spending more than 50% are "severely cost-burdened."
• Policy Goals: Governments and housing agencies aim to increase the supply of affordable housing to ensure that all residents have access to safe, decent, and affordable places to live.
• Role of ADUs: Accessory Dwelling Unit (ADU)s are sometimes promoted as a means to increase housing supply and offer more affordable rental options in single-family zoned areas. However, it's important to note that an ADU itself does not automatically qualify as an "affordable dwelling unit" under specific housing policy definitions, which often have strict income and cost criteria. Local regulations and definitions must be consulted.

Understanding affordable housing is crucial for MLOs, as it impacts various loan programs, community development initiatives, and the overall housing market dynamics.