With the passage of a long time, the Housing Act of 1949 came the American Dream of providing decent housing for every American family is still lives. The many housing acts have been passed in the United States to promote homeownership in fact this nation is far from making its visions. Affordable housing is of social epidemic facing this country. The economy continues to flounder and the family household incomes are dropping although housing prices are increasing. But the housing problem expands despite many efforts from the nonprofit and private sectors. This report suggests that the lack of affordable housing is a major motive of these high rents and also identifies barriers that affordable housing developers may encounter during the development process.

The challenge in providing affordable housing is similar to defining the term. While an explicit definition for affordable housing has not been defined, a widely accepted implicit definition is that monthly housing costs need not exceed 30% of a family’s household income (Wallace 1995). Other definitions are commonly used, such as “housing targeted to the middle and lower-income markets” (Linstokin and Listokin, 2001), approximately 80% to 120% of the Area Median Income (AMI). However, for the sake of this report the implicit definition from Wallace will be used. Additionally, mention of “low-income” and “very low-income” households should be defined for the sake of this report. The U.S. Department of Housing and Urban Development (HUD) considers low-income households as those earning incomes at or below 80% of the AMI, and very low-income households as those earning incomes at or below 50% of the AMI. These definitions serve as supplemental information; henceforth the term ‘affordable housing’ will imply housing designated for both low- and very low-income families.