Low-Income Housing Qualifications in Alabama

Income Categories Defined by HUD

The U.S. Department of Housing and Urban Development sets income limits each year for every metro area and county in the country. Alabama's housing programs use these limits to determine who qualifies. There are three primary income categories:

Extremely Low Income (ELI)

Households earning at or below 30 percent of the Area Median Income. For the Huntsville-Decatur-Albertville metro area, this translates to approximately $22,100 per year for a family of four. Single individuals fall around $15,500. These households receive the highest priority for public housing and Section 8 vouchers.

Very Low Income (VLI)

Households earning between 30 and 50 percent of AMI. In the Huntsville metro, the VLI threshold for a family of four is approximately $36,800. This is the primary target population for public housing and the income ceiling for most Section 8 voucher recipients.

Low Income (LI)

Households earning between 50 and 80 percent of AMI. The Huntsville limit for a family of four is roughly $58,900. This category qualifies for LIHTC apartments, HOME-funded units, and some local assistance programs.

What Counts as Income

Housing programs count nearly all sources of regular income when determining eligibility. Understanding what is included and what is excluded prevents surprises during the verification process.

Income That Counts

• Wages, salaries, overtime pay, commissions, and tips
• Self-employment income (net after business expenses)
• Social Security benefits (retirement, disability, survivors)
• Supplemental Security Income (SSI)
• Pension and retirement fund distributions
• Unemployment compensation
• Alimony and child support received
• Regular cash contributions from family or friends
• Interest and dividend income from bank accounts and investments
• Veterans Administration benefits

Income That Does Not Count

• One-time lump sum payments (insurance settlements, inheritance)
• SNAP (food stamps) benefits
• Foster care payments
• Educational scholarships and grants used for tuition
• Earned income of full-time students under 18
• Temporary emergency assistance payments

Background Check Requirements

All federally assisted housing programs require criminal background checks for adult applicants. The screening typically covers the previous five to seven years of criminal history, though policies vary by housing authority and property manager.

Automatic Disqualifiers

Federal law mandates denial for two categories: individuals convicted of manufacturing methamphetamine on federally assisted housing premises, and individuals subject to lifetime sex offender registration. These are the only automatic, permanent bars under federal rules.

Case-by-Case Evaluation

For all other criminal history, most Alabama housing authorities evaluate applications individually. Factors they consider include the nature and severity of the offense, how much time has passed since the conviction, evidence of rehabilitation such as completed programs, employment history, or character references, and whether the offense would pose a threat to other residents or property.

HUD issued guidance in 2016 requiring housing providers to consider these factors rather than applying blanket bans. If you have a criminal record, do not assume you will be automatically denied — apply and provide context about your circumstances.

Credit and Rental History Requirements

Credit checks are standard for most housing programs, but the standards are generally more lenient than those of market-rate landlords. Public housing does not have a minimum credit score requirement. LIHTC properties may set their own screening criteria, but they cannot be more restrictive than what is justified by legitimate business reasons.

Rental history reviews focus on past evictions and outstanding balances owed to previous landlords. A history of lease violations, particularly for property damage or criminal activity, can weigh against an application. If you owe money to a previous housing authority, you will typically need to pay that debt or establish a repayment plan before being approved for new assistance.

Citizenship and Immigration Status

Federally assisted housing programs — including public housing and Section 8 — require that at least one household member be a U.S. citizen or have eligible immigration status. Eligible non-citizen categories include lawful permanent residents (green card holders), refugees, asylees, and certain other documented statuses.

Mixed-status families, where some members are eligible and others are not, can still qualify. However, the housing subsidy is prorated based on the number of eligible household members. LIHTC properties do not have citizenship requirements because they receive tax credits rather than direct federal rental assistance.

What Can Disqualify You

Beyond the automatic bars mentioned above, the following issues can lead to denial:

• Income above the program's limit for your household size and county
• Outstanding debt owed to a housing authority that has not been repaid or placed on a payment plan
• Previous eviction from federally assisted housing due to drug-related criminal activity within the past three years
• Current illegal drug use by any household member (not past use if the individual has completed treatment)
• Providing false or misleading information on the application
• Failure to respond to requests for documentation within the required timeframe

If you are denied, you have the right to an informal hearing to contest the decision. Request this hearing in writing within 10 to 14 days of receiving your denial letter. You can present evidence, bring witnesses, and explain any mitigating circumstances. For more information on federal housing eligibility standards, visit HUD's rental assistance resource page.

Frequently Asked Questions

What is considered low income in Alabama?

HUD defines low income as below 80 percent of Area Median Income. For the Huntsville metro, that is approximately $58,900 for a family of four. Very low income falls below 50 percent of AMI (around $36,800 for four), and extremely low income is at or below 30 percent of AMI (approximately $22,100 for four). These figures adjust annually and vary by household size.

Do I need a background check for low-income housing?

Yes, all adults applying for federally assisted housing undergo criminal background screening. Federal law mandates denial only for methamphetamine manufacturing on assisted property and lifetime sex offender registration. Other criminal history is reviewed on a case-by-case basis considering the offense type, time elapsed, and rehabilitation evidence. Many applicants with past criminal records are approved.