Glossary of Terms

Affordable Housing. Housing is considered affordable when a household pays no more than 30% of gross monthly income on housing. Government affordable housing programs include Section 8 rental vouchers, public- and private-sector reduced-rent housing and home buyer assistance.

Area Median Income (AMI). A statistic generated by the U.S. Department of Housing and Urban Development (HUD) for the purpose of determining the eligibility of applicants for certain federal housing programs. HUD determines AMI on an annual basis by region, making adjustments for household size and other factors. Different housing programs use different percentages of AMI – such as 30% of AMI or 80% of AMI – as maximum income limits.

Community Development Block Grant (CDBG). A federal program that provides annual grants on a formula basis to states, larger cities and urban counties. It is used for a wide range of community development activities directed toward neighborhood revitalization, economic development, affordable housing, and improved community facilities and services.

Condominium Conversion. Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership.

Consolidated Plan (“Con Plan”). A locally developed plan that explains how federal funding will be invested in housing assistance and community development.

Density Bonus. Permission granted by a municipality to build more or larger units than otherwise allowed by the existing zoning codes. Density bonuses are sometimes included as an “offset” to compensate developers for revenue that may be lost due to a requirement in an inclusionary zoning ordinance that a share of newly developed units be affordable to working households. In other cases, density bonuses are granted as an incentive to encourage owners to voluntarily include affordable units within new developments.

Economic Development Academy (EDA). Career development and financial education centers for clients of the San Diego Housing Commission, designed to encourage economic independence.

Extremely Low-Income. Term used by HUD and housing authorities to refer to housing applicants making 30% or less of Area Median Income (AMI).

Fair Housing Act. A 1968 act (amended in 1974 and 1988) providing the HUD Secretary with fair housing enforcement and investigation responsibilities.

Fair Market Rent (FMR). Term used in the Section 8 Housing Choice Voucher Program that refers to the rent including the cost of utilities (except telephone) that would be required to be paid in the housing market area to obtain privately owned, existing, decent, safe and sanitary rental housing of modest (non-luxury) nature with suitable amenities. FMRs for existing housing are established by HUD for housing units of varying sizes (number of bedrooms) and published in the Federal Register.

Family Self-Sufficiency Program (FSS). A HUD program that helps low-income households obtain employment that will lead to economic independence and self-sufficiency.

First-Time Homebuyer (FTHB). For SDHC programs, this is defined as someone who has not owned real estate in the past three years.

Fiscal Year (FY). SDHC’s fiscal year is July 1 through June 30. HUD’s fiscal year is October 1 through September 30.

For-Sale Affordable Housing. Homes for sale at below-market rate prices.

Gross Rent. Term used in the Section 8 Housing Choice Voucher Program to refer to the total rent charged by a rental owner.

Home Investment Partnerships (HOME). A HUD program that provides formula grants to states and localities – often in partnership with local nonprofit groups – to fund activities that build, buy, and/or rehabilitate affordable housing for rent or homeownership or provide direct rental assistance to low-income households.

Housing Assistance Payment (HAP). Payment from a housing authority to a rental owner to help subsidize the rent of a household participating in the Section 8 Housing Choice Voucher Program.

Inclusionary Zoning. A requirement or incentive to reserve a specific percentage of units in new residential developments for moderate-income households.

Individual Development Accounts (IDA). Matched savings accounts that enable low-income households to save, build assets and enter the financial mainstream.

In-lieu Fee. A cash payment some municipalities allow developers to pay instead of including affordable units within a particular development, as required under an inclusionary zoning policy. In-lieu fees are often deposited into a housing trust fund, where they are used to fund other affordable housing initiatives.

Land Bank. Governmental or quasi-governmental entities dedicated to assembling properties – particularly vacant, abandoned, and tax-delinquent properties – and putting them to productive use.

Linkage Fee. Linkage fees are adopted by local governments to meet additional housing needs created by economic development. In communities with linkage fee requirements, developers of non-residential buildings pay a fee, often based on project type (manufacturing, commercial, retail, etc.) and square footage, which is generally deposited in a housing trust fund and used to support affordable housing initiatives.

Low-income. Term used by HUD and housing authorities to refer to housing applicants making 80% or less of Area Median Income (AMI).

Low-Income Housing Tax Credit. The federal low-income housing tax credit is the principal source of federal funding for the construction and rehabilitation of affordable rental homes. The tax credits are a dollar-for-dollar credit against federal tax liability. States allocate the tax credits to developers according to the criteria set out in the states' qualified allocation plans. Developers then work with syndicators to sell the credits to investors – generally for-profit corporations and investment funds – generating the equity necessary to complete their projects. Some states also have similar tax credit programs.

Mortgage Credit Certificate (MCC). A resource offered to assist first-time home buyers.
With an MCC, 15-20% of a home buyer’s annual mortgage interest is counted as a federal tax deduction.

Mixed-Income. A type of development that includes households at various income levels. Mixed-income developments are intended to deconcentrate poverty and give lower-income households access to improved amenities.

Multifamily. A type of property that is designed for more than one family, such as a condominium or apartment building.

North City Future Urbanizing Area (NCFUA). Previously undeveloped open space in the northern region of the City of San Diego; later zoned with an inclusionary requirement that developers would have to set aside 20% of residential construction as affordable. The area is comprised of four communities: Black Mountain Ranch, Del Mar Mesa, Pacific Highlands Ranch, and Torrey Highlands.

Notice of Funding Availability (NOFA). An official announcement by a public agency to inform potential applicants of funding and contracting opportunities.

Public Housing. A federal public housing program established to provide decent and safe rental housing for eligible low-income households, the elderly, and persons with disabilities.

Reasonable Rent. Term used in the Section 8 Housing Choice Voucher Program to compare a proposed rent to rents of comparable units in the area for the purpose of ensuring that the amount is reasonable.

Single Room Occupancy Hotel (SRO). Residential structures of six or more units in which the units are the hotel guests’ primary residence. One of the country’s oldest forms of affordable housing for single and elderly low-income individuals. Typically, an SRO room will have a sink and a closet. Bathrooms, showers, and kitchens are usually shared.

Section 8 Housing Choice Voucher Program. A federal rental housing assistance program that helps low-income households afford the costs of rental homes on the private market. Eligible households contribute about 30% of income for housing, including utilities, and the government covers the balance of costs through a subsidy. Although it is commonly referred to as “Section 8,” it is now officially called the Housing Choice Voucher Program.

Shared Appreciation Loan. A form of financial assistance for homeownership in which the home buyer must repay the original loan amount plus some percentage of the home price appreciation in lieu of interest. Shared appreciation loans are often structured as a silent second mortgage that does not need to be repaid until the home is sold.

Shared Equity. A form of financial assistance for homeownership in which a public or philanthropic entity provides funding to help a family purchase a home. In return, the entity shares in any home price appreciation that occurs while the family lives there, preserving the buying power of the subsidy in the face of rising home prices.

Silent Second Mortgage. A secondary home loan issued to supplement a family’s primary mortgage that does not need to be repaid until the home is resold (or in some cases, refinanced).

Tax-Exempt Bonds. Tax-exempt housing bonds sold by state and local governments, more commonly known as Mortgage Revenue Bonds (MRBs) and Multifamily Housing Bonds. Used to finance mortgages for low-income first-time home buyers or the production of affordable apartments. Similar to other types of government bonds, they are attractive to investors because of their relative safety as compared to stocks and because they are exempt from certain taxes.

Tenant Rent Portion. Term used in the Section 8 Housing Choice Voucher Program to refer to portion of rent for which the tenant is responsible. It is the difference between the gross rent and the housing assistance payment made by the housing authority to the owner.

Utility Allowance. Term used in the Section 8 Housing Choice Voucher Program and other government-funded affordable housing to refer to a housing authority’s calculation of a tenant’s average cost for monthly utilities. This figure is used to determine the tenant’s rent portion.

U.S. Department of Housing and Urban Development (HUD). Established in 1965, HUD works to create a decent home and suitable living environment for all Americans; it does this by addressing housing needs, improving and developing American communities, and enforcing fair housing laws.

Very Low-Income. Term used by HUD and housing authorities to refer to housing applicants making 50% or less of Area Median Income (AMI).