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What is affordable housing?

on 01-08-2008 11:03

Talk of affordable housing is all over town, but what is considered “affordable”?
Affordable housing is determined by taking 80 percent of Sedona’s median income and spending 35 percent of that on rent or mortgage, Jessica Williamson, the city’s housing planner, explained.
As of Feb. 19, 2008, the median income in Yavapai County was $50,500, so a family of four making 80 percent of the median income, makes $40,400.
Thirty-five percent of that, $14,140, is what that family can spend on housing each year, which means monthly rent or a mortgage payment of roughly $1,178 is considered affordable.
According to Williamson, someone making $26,808 to $35,268 per year could purchase a $150,000 home by paying $1,117 a month with a 6.25 percent interest rate and a $4,500 down payment.
With a $9,000 down payment and a 6.25 percent interest rate, someone making $52,368 to $68,904 could purchase a $300,000 home, with the most optimistic financial considerations, she said.