Affordable Housing Glossary

Affordable Housing:  "Affordable Housing" refers to the relationship between the price of housing in a region (either sale price or rent) and household income.  Affordable housing is that which is affordable to households of very low, low and moderate incomes.  For housing to be affordable, shelter costs must not exceed 30 percent of the gross annual income of the household.

Affordable Housing Fund (AHF): City of Elk Grove fee program for which revenues come from development impact fees paid by residential project applicants at building permit issuance.  Revenues in the AHF must be used to provide assistance with new rental residential development costs for very low and low income housing and may also be used for homeowner down payment assistance for very low and low income households.  

Affordable Housing Loan Program Guidelines:  Policies and procedures the City of Elk Grove has established to administer the Affordable Housing Loan Program.

Area Median-Income (AMI):  Each year, the federal government calculates the median income for communities across the country to use as guidelines for federal housing programs. Area median incomes are set according family size.

Conditional Funding Commitment: Loan applicants for projects which have not yet received approval of their Development Review application may obtain a Conditional Funding Commitment from the City Council.  With a Conditional Funding Commitment, the loan amount and loan terms approved for a proposed project will be reserved for a maximum period of one year, then the loan commitment automatically terminates if project entitlements are not received.  Without exception, all conditions must be met to later obtain a Funding Commitment. 

Density:  This refers to the number of housing units on a unit of land (e.g. ten units per acre).

Density Bonus Programs:  Allows minimum density increase over the zoned maximum density of a proposed residential development, if the developer makes a specified amount of units affordable to lower income households.

Development Impact Fees: A fee or charge imposed on developers to pay for a jurisdiction’s costs of providing services to new development.

Funding Commitment:  City Council will provide a Funding Commitment after Development Review entitlements are approved. Applicants must meet the conditions associated with receipt of the Conditional Funding Commitment earlier in the loan review process.

Gap Financing:  The City of Elk Grove Affordable Housing Loan Program assists affordable housing developers by providing loans for development financing.  The loans are intended to be “gap” financing.  The “gap” is defined as the difference between total development cost and the maximum potential project funding raised from private and public sources other than Elk Grove’s AHF and VLIHTF.

HUD: The United States Department of Housing and Urban Development is cabinet level department of the federal government that oversees program and funding for affordable housing laws, development, and federally funded financial assistance. 

HUD Area Median Family Income: HUD is required by law to set income limits that determine the eligibility of applicants for HUD's assisted housing programs. Income limits are calculated annually for metropolitan areas and non-metropolitan counties in the United States. They are based on HUD estimates of median family income, with adjustments for family size. Adjustments are also made for areas that have unusually high or low income to housing cost relationships.

Low Income: Low income households are households that earn between 51-80% of area median income adjusted for household size. 

Market Rate Housing: Housing that is not built or maintained with the help of government subsidy.  The prices of market rate homes are determined by the market and are subject to the laws of supply and demand.

Moderate-Income:  Moderate-income households are defined as households with incomes between 80 percent and 120 percent of the county median. 

Very-Low Income: Very low income households are households that earn 50% or less of the area median income adjusted for household size.

Very Low Income Housing Trust Fund: City of Elk Grove fee program for which revenues come from development impact fees paid by non-residential project applicants at building permit issuance.  Revenues in the VLIHTF must be used to assist in the development of residential housing for very low income households only.