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Mon, Sept. 23

THE GOOD PATIENT: Subsidized housing an alternative to retirement communities

This is the 21st in a series of articles intended to demystify retirement communities.

Readers living on limited incomes may find that retirement communities discussed in previous articles are out of reach.

An alternative is very affordable apartments available to people aged 62-plus through programs run by the U.S. Department of Housing and Urban Development (HUD). Residents in HUD-subsidized apartments pay a relatively small portion of the rent that their apartments would command on the open market; the federal government pays the rest.

Three sites visited for this article are Casa de Pinos (run by Retirement Housing Foundation, affiliated with the United Church of Christ), Village Tower (run by the Evangelical Lutheran Good Samaritan Society), and Bradshaw Senior Community.

The first two run under one type of HUD program often referred to as Section 8 housing; Bradshaw operates under a different federal program, called Section 42, which has somewhat different rules and requirements. I'll describe the financial arrangements for the first two first.

Each complex has a different contract with HUD that specifies how many apartments can be rented to people with "low income," "very low income," and "extremely low income." At both Casa de Pinos and Village Tower, only people with "very low income" (for 2013 in Yavapai County, under $19,250/year) and "extremely low income" (under $11,550/year) qualify for apartments at this time.

The income limits are established separately for every county, so people who qualify in one county might not qualify in another.

The limits are adjusted upwards - although not by much - for larger households. For two people, the household income limit for the "very low income" category is $22,000 and for the "extremely low income" category, the limit is $13,200.

Assets are considered, but people do not have to use up all of their assets ("spend down") to qualify. Depending on several variables, HUD calculations consider either the actual income from assets (interest, dividends, etc.) or assume that they provide income equal to 2 percent of assets' market value.

That is, if someone owns stock worth $100,000, then under the 2 percent approach, $2,000 would be added to their income from other sources such as Social Security, pensions and so forth, to come up with their total income.

Suppose that Linda has $15,000 in total income. Assuming that she is a U.S. citizen or eligible immigrant, that she passes a background check, and that an apartment is available, she would be eligible to rent a subsidized apartment.

At Casa de Pinos and Village Tower, the rent charged is limited to 30 percent of the residents' adjusted income.

The calculation is more complex than you might assume, because potential residents are permitted to subtract out some allowances and expenses to get to the adjusted income used to determine their rent.

For example, medical expenses in excess of 3 percent of income can be subtracted out.

Suppose that Linda has $5,450 in annual medical expenses. Three percent of her $15,000 income is $450. Anything beyond that - in this case $5,000 - can be subtracted from income to find adjusted income. Thus, her adjusted income is $10,000.

Thirty percent of $10,000 is $3,000, so she can get an apartment for $3,000/year - $250/month.

At Bradshaw Senior Community, the income limits are $24,240 for one person and $27,720 for two. The rent calculations are done a little differently and also vary with apartment size. In some cases, rents as a percentage of income could be higher than at the other two sites.

Calculations for all three sites are complex and waiting lists are common, so it's reasonable to start checking out this option and get help with the calculations to see if you qualify well before you think that you might want to make such a move.

Applicants for HUD apartments need to provide documentation of their income and assets initially as part of the application process and annually after that, to show that they are eligible for this housing.

Appealing features of these HUD-subsidized complexes are discussed in the next article. Two subsequent articles will describe an Arizona state program that can provide subsidized housing and medical care for life for some people who have lived in Arizona for a very long time.

Elizabeth L. Bewley is president and CEO of Pario Health Institute and the author of "Killer Cure: Why Health Care Is the Second Leading Cause of Death in America and How to Ensure that It's Not Yours." To tell Elizabeth your story or to ask her a question, write to

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