There are many kinds of protected housing in Spain. From the late VPOs (started in the Franco era) to the last VPP (officially protected housing), VLT (private promoted housing with officially fixed price), VIS (social insertion housing), etc…
Law varies a lot from region to region as now housing is an issue regulated by the different Autonomous Communities in Spain (Different ways of protection, conditions, warranties, etc…)
Any permanent and legal resident in Spain has the right to apply for a protected home, remember that if you are an UE citizen and a permanent resident you have just the same rights here as every Spaniard…
I disagree with Mark in the prototype of VPO applicant he describes. Last official reports show that the average would be a 35 to 45 year couple with one or two kids earning 3 to 4 times the Spanish minimum wage.
As for the locations you will find protected housing, things are starting to change. Authorities, at least here in Asturias, have finally realized that it’s not good for a rational city development to create ghettos so, in the new planning regulations, they are reserving land to promote this kind of housing in every new area to develop (12.500 new protected houses are planed for the next five years here, half of them only in Oviedo, the capital city, traditionally a expensive, and lets say snob area)
So… it depends of your economical status… and again… if you are looking for a resale VPO property be very, very, very careful