Your Guide to Income Restricted Apartments: How They Work and Who They're For

If you've been apartment hunting in Denver and kept seeing the phrase "income restricted," you might have scrolled past it without a second thought — assuming it didn't apply to you, or that you'd need to jump through too many hoops to find out. That assumption is worth reconsidering.

Income restricted apartments are one of the most practical and accessible forms of affordable housing available today, and a lot of people who qualify for them don't realize it. Understanding how they work, what the eligibility process actually looks like, and what life in one of these communities can genuinely offer can be difficult to do when you have no prior knowledge of them, which is where we come in!

What Are Income Restricted Apartments?

At their core, income restricted apartments are rental units where the monthly rent is capped below the going market rate. That cap exists because the development received government funding, tax credits, or some combination of both in exchange for agreeing to keep rents at a level that's accessible to households within certain income brackets.

The most common funding mechanism behind these properties is the Low-Income Housing Tax Credit program, often called LIHTC or Section 42. Through this program, private developers receive federal tax credits for building or rehabilitating housing and agreeing to reserve units for residents who meet specific income thresholds. There are nearly 1 million income restricted apartments across the United States, supported by over $51 billion in annual federal spending. It's a wide-reaching program, and it's responsible for much of the affordable housing that exists in cities like Denver today.

Holly38, located in Denver's Northeast Park Hill neighborhood, is one example of what this kind of development can look like when it's done right — a brand-new, well-designed community built specifically to serve families and individuals who need quality housing at a price point that works.

How Does Income Eligibility Actually Work?

Eligibility for income restricted apartments is based on something called Area Median Income, or AMI. AMI represents the midpoint of all household incomes in a specific area, and income limits for these apartments are typically set at various tiers — commonly 30%, 50%, or 80% of that figure. HUD, the U.S. Department of Housing and Urban Development, calculates and publishes updated AMI figures every year.

What this means in practice: if you're a household of three and your area's AMI is $90,000, you might qualify for a unit restricted to 60% AMI if your household earns $54,000 or less. The thresholds shift based on both location and household size, which means a family of four will generally have a higher qualifying limit than a single-person household.

What are the Income Tiers?

There are three separate income tiers to consider. 

30% AMI

This tier serves households with the lowest incomes and typically carries the most affordable rents. Units at this level often have waiting lists, as demand tends to be high.

50% AMI

Sometimes called the "very low income" threshold, this tier serves working families and individuals whose earnings fall well below the regional median.

60% AMI

This is one of the most common thresholds in LIHTC-funded developments. It covers a wide range of working households — teachers, healthcare workers, tradespeople, and many others who contribute meaningfully to their communities but find market-rate rent out of reach.

80% AMI

HUD titles 80% of AMI as the "low income" threshold. At this level, many households are working full-time and earning a reasonable wage — they just happen to live in a city where housing costs have outpaced income growth. This is more common than most people realize, particularly in Denver.

At Holly38, units are available for households earning between 30% and 80% AMI, depending on the unit type. That's a broad range, and it means the community is genuinely built to serve people across different life circumstances and income levels.

Income Restricted vs. Income Based: What's the Difference?

Income restricted housing has a fixed, below-market rent based on the Area Median Income — the rent for the apartment is capped and stays predictable regardless of minor changes in your personal income. Income based housing, like Section 8, ties your rent directly to your earnings, so you typically pay around 30% of your adjusted gross income and a government voucher covers the rest.

In plain terms: with income restricted apartments, the rent is set at an affordable rate by design. With income based housing, what you pay shifts as your income does. For example, Holly38 is an income restricted community, which means rent is fixed and predictable — and utilities are included on top of that. Translation? You’ll never get a surprise rent bill! 

Common Misconceptions About Income Restricted Apartments and Communities

Income restricted apartments carry some unfair assumptions that are worth briefly addressing. The most common one is that these communities are lower quality or less desirable than market-rate properties — that "affordable" is a euphemism for outdated, worn-down, or poorly managed.

That simply isn't accurate for well-run developments, and Holly38 is a clear example of why. Our property opened in 2025 as the largest city-supported affordable housing development in Denver since the Department of Housing Stability was established and it was built with the same attention to design and livability you'd expect from any quality apartment community. In-unit washer and dryer, private deck or patio, modern finishes, a full clubhouse, on-site preschool and after-school programming, and free access to the nearby Boys & Girls Club. 

What to Expect When You Apply for Income Restricted Apartments

The application process for income restricted apartments is more thorough than a standard rental application, but it's manageable when you know what to prepare. Most income restricted communities will ask for:

• Proof of income: Recent pay stubs, tax returns, and documentation of any benefits like Social Security or disability payments
• Government-issued photo ID: For all adult household members
• Birth certificates and Social Security cards: For all household members, including children
• Bank and asset statements: Checking, savings, retirement accounts, and any other significant assets

Having these organized before you begin saves time and reduces back-and-forth with the leasing team.

Eligibility Verification

Once you apply, the property management team will verify that your household income falls within the qualifying range for the specific unit you're applying for. This process exists to make sure the housing reaches the people it was built to serve — it's not a barrier, it's a safeguard.

Holly38's team is available to walk you through eligibility questions before you formally apply. If you're not sure whether you qualify, reaching out directly is always worth it — you may be closer to eligible than you think.

What Does Life in an Income Restricted Community Look Like? 

This is the question that matters most to most people — and it's also where the gap between perception and reality tends to be widest.

For many residents, life in an income restricted apartment community isn't meaningfully different from life in any well-run market-rate building. You have a home that's yours, neighbors working through similar chapters of life, shared amenities, and a management team responsible for keeping things running smoothly. What's different is that the rent reflects what you actually earn rather than what the market happens to be doing in a given year.

Here’s What to Look for in a Quality Income Restricted Community

Not all income restricted apartment communities are created equal, and knowing what separates a good one from a great one helps you find somewhere worth putting down roots. The markers of a well-run community tend to include:

• Modern, well-maintained units: New or recently renovated construction with quality finishes and functioning appliances
• Responsive on-site management: A team that communicates clearly, handles maintenance promptly, and treats residents with respect
• Meaningful amenities: Shared spaces, programming, and resources that actually serve the people living there
• A safe, connected neighborhood: Proximity to transit, schools, parks, and services that support daily life
• Transparent costs: No hidden fees or surprise charges that undermine the affordability the community was built around

A Real Example: Holly38 in Denver's Northeast Park Hill

One of the best ways to understand what income restricted apartments can genuinely offer is to look at a real community built around that mission.

Holly38 sits in the Northeast Park Hill neighborhood, minutes from City Park, public transit, local schools, and the kinds of neighborhood amenities that make daily life easier and more connected. The development spans six acres with 253 units ranging from one to four bedrooms — meaning it serves a range of household sizes, not just one narrow demographic.

The community amenities go well beyond what most market-rate properties offer: a clubhouse with a community kitchen, workstations, large-screen TVs, and a dedicated kids' corner. Space on-site is reserved for preschool and after-school programming. Residents have free access to the nearby Boys & Girls Club. And all utilities are included in the rent — one of the more underappreciated perks of a well-run income restricted apartment, and a detail that makes monthly budgeting genuinely predictable.

About Delwest Management

Holly38 is managed by Delwest Management, the property management arm of Denver-based Delwest. Delwest's approach to affordable housing development is grounded in a simple but meaningful conviction: that quality and affordability can — and should — coexist. Over the past several years, the company has developed more than 300 affordable housing units across the Denver metro area, partnering with local nonprofits and community organizations to bring wraparound services to their residents. They understand that stable, well-managed housing is the foundation that allows families to build everything else — and that shows up in the day-to-day experience of living in a Delwest community.

Is an Income Restricted Apartment the Right Fit for You?

If you've been searching for new affordable apartments in Denver and wondering whether income restricted apartments are worth looking into, the honest answer is: probably yes, if you haven't already. The income thresholds are broader than most people assume, the communities themselves have come a long way from outdated perceptions, and the financial relief of below-market rent — especially with utilities included — can make a real difference in quality of life.

To learn more about Holly38 or find out whether you qualify, reach out to our leasing team directly or check out our available units today.