| Documentation: | Income Limits and Fair Market Rent 2019 |
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Publisher: The Department of Housing and Urban Development (HUD)
| Document: | Income Limits Technical Documentation |
| citation: | Methodology for Determining Section 8 Income Limits, Methodology for Calculating FY 2019 Medians, The Department of Housing and Urban Development (HUD) |
Chapter Contents
The Department of Housing and Urban Development (HUD) is required by law to set income limits that determine the eligibility of applicants for HUD's assisted housing programs. The major active assisted housing programs are the Public Housing program, the project-based Section 8 program, the Section 8 Housing Choice and Project-Based Voucher programs, Section 202 housing for the elderly program, and Section 811 housing for persons with disabilities program. There are many other HUD and non-HUD programs that use median incomes and/or income limits to determine eligibility and sometimes funding amounts or rents. There is a listing of Federal programs in Attachment 1.
HUD Section 8 Income Limits begin with the production of median family incomes. HUD uses the Section 8 program's Fair Market Rent (FMR) area definitions in developing median incomes, which means that median incomes are developed for each metropolitan area, parts of some metropolitan areas, and each non-metropolitan county. For fiscal year (FY) 2019, there are two changes to the geographic area definitions used last year. First, the two counties (islands) that comprise the Kahului-Wailuku-Lahaina, HI will no longer have separate income limits; there is one income limit throughout the metropolitan area for FY 2019. Second, Enid, OK is a new metropolitan area, formed out of nonmetropolitan Garfield County. HUD Section 8 Income Limits are calculated for every FMR area with adjustments for family size and for areas with unusually high or low family income or housing-cost-to-income relationships.
The statutory basis for HUD's income limit policies is Section 3 of the U.S. Housing Act of 1937, as amended.2 Attachment 2 provides the key excerpts relevant to income limits, which may be summarized as follows:
Low-income families are defined as families whose incomes do not exceed 80 percent of the median family income for the area.
Very low-income families are defined as families whose incomes do not exceed 50 percent of the median family income for the area. The FY 2014 Continuing Appropriations Act defines Extremely Low-Income Families as very lowincome families whose incomes do not exceed the greater of 30 percent of the median family income for the area or the federal poverty guidelines as published by the Department of Health and Human Services.
The Extremely Low-Income Limits based on poverty guidelines are capped by the Very Low-Income Limit.
Income limits for non-metropolitan areas may not be less than limits based on the State nonmetropolitan median family income level.
The Secretary of Agriculture is to be consulted prior to establishing income limits for rural areas, since these limits also apply to certain Rural Housing and Community Development Service programs.
Footnotes:
1Also known as HUD Public Housing/Section 8 Income Limits
2 42 U.S.C. 1437b
HUD Section 8 Income Limits begin with the production of median family incomes. HUD uses the Section 8 program's Fair Market Rent (FMR) area definitions in developing median incomes, which means that median incomes are developed for each metropolitan area, parts of some metropolitan areas, and each non-metropolitan county. For fiscal year (FY) 2019, there are two changes to the geographic area definitions used last year. First, the two counties (islands) that comprise the Kahului-Wailuku-Lahaina, HI will no longer have separate income limits; there is one income limit throughout the metropolitan area for FY 2019. Second, Enid, OK is a new metropolitan area, formed out of nonmetropolitan Garfield County. HUD Section 8 Income Limits are calculated for every FMR area with adjustments for family size and for areas with unusually high or low family income or housing-cost-to-income relationships.
The statutory basis for HUD's income limit policies is Section 3 of the U.S. Housing Act of 1937, as amended.2 Attachment 2 provides the key excerpts relevant to income limits, which may be summarized as follows:
Low-income families are defined as families whose incomes do not exceed 80 percent of the median family income for the area.
Very low-income families are defined as families whose incomes do not exceed 50 percent of the median family income for the area. The FY 2014 Continuing Appropriations Act defines Extremely Low-Income Families as very lowincome families whose incomes do not exceed the greater of 30 percent of the median family income for the area or the federal poverty guidelines as published by the Department of Health and Human Services.
The Extremely Low-Income Limits based on poverty guidelines are capped by the Very Low-Income Limit.
Income limits for non-metropolitan areas may not be less than limits based on the State nonmetropolitan median family income level.
The Secretary of Agriculture is to be consulted prior to establishing income limits for rural areas, since these limits also apply to certain Rural Housing and Community Development Service programs.
Footnotes:
1Also known as HUD Public Housing/Section 8 Income Limits
2 42 U.S.C. 1437b
The very low-income limits (usually based on 50 percent of median incomes) are the basis of all other income limits, as they are the best-defined income limits and have been the subject of specific, limited legislative adjustments subsequent to reviews of the HUD calculation methodology. In addition, a number of other income limit calculations are tied by legislation or regulation to their calculation.
There are currently several legislated income limit standards (e.g., 30%, extremely lowincome limits, 50%, 60%, 65%, 80%, 95%, 100%, 115%, 125%) that were intended to have progressive relationships. To ensure that this occurs, the very low-income limits have been used as the basis for deriving other income limits unless that relevant statutory language has no references or relationship to low- and very low-income limits as defined by the U.S. Housing Act of 1937. If this were not done, for instance, HUD low-income limits would be less than very low-income limits in areas where very low-income limits had been adjusted upward by more than 60 percent because of unusually low area median family incomes relative to the Section 8 Fair Market Rents (FMRs).
Very low-income limits are calculated using a set of formulae as follows. The first step is to calculate a four-person income limit equal to 50 percent of the area median family income. Adjustments are then made if this estimate is outside formula constraints. More specifically, the very low-income limit for a four-person family is calculated as follows:
(1) 50 percent of the area median family income is calculated and set as the preliminary four-person family income limit;
(2) the four-person very low-income limit is increased if it would otherwise be less than the amount at which 35 percent of it equals 85 percent of the annualized two-bedroom 40th percentile rent. This adjusts income limits upward for areas where rental housing costs are unusually high in relation to the median income;
(3) the four-person very low-income limit is reduced to the greater of 80 percent of the U.S. median family income level, or the amount at which 30 percent of a four-person family's income equals 100 percent of the two-bedroom 40th percentile rent. This adjusts income limits downward for areas of unusually high median family incomes;
(4) the four-person income limit is increased if it is less than 50 percent of the relevant state non-metropolitan median family income level,3 and;
(5) the four-person income limit is increased if it is less than 95 percent of last year's very low-income limit and reduced to the greater of 105 percent of last year’s very low-income limit or twice the change in the national median family income estimate if that amount would be larger than 5 percent. Between FY 2018 and FY 2019, the estimate of national median family income increased and the change in income limits is capped at 110 percent of last year's very lowincome limit. HUD uses 40th percentile rents instead of FMRs that include 50th percentile areas, to calculate high housing cost areas. This is to create a uniform national standard for the relationship between the rent and income distributions in defining the high- and low-housing cost adjustments, and, in the past, to prevent fluctuations in Low-Income Housing Tax Credit Difficult Development Area (DDA) determinations that result solely from high housing cost income limit fluctuations as areas go in and out of the 50th percentile FMR program. Beginning with the FY 2018 FMRs, no additional 50th percentile areas can be designated, so this use of 40th percentile rents only impacts the few remaining areas where the three-year 50th percentile FMR has not expired. For FY 2019, only three areas continue to use 50th percentile FMRs, Bergen-Passaic, NJ HMFA, San DiegoCarlsbad, CA MSA, and Spokane, WA HMFA. FY 2019 is the last year for 50th percentile FMRs.
Table 1 summarizes the rules governing very low-income limit determinations:
Table 1 Summary of Income Limits Determinations for FY 2019 Very Low-income Limits
Footnotes:
3 A Housing and Community Development Act of 1987 amendment directed that non-metropolitan area income limits should never be set at less than if they were based on the State non-metropolitan median family income level. In implementing this provision, HUD used its discretion to apply this policy to metropolitan areas to avoid inequities that would otherwise result. Doing so avoids the anomaly of assigning higher income limits to a non-metropolitan county than are assigned to an adjacent metropolitan area where the median family income is less than the State non-metro level but above the level for the non-metro county.
There are currently several legislated income limit standards (e.g., 30%, extremely lowincome limits, 50%, 60%, 65%, 80%, 95%, 100%, 115%, 125%) that were intended to have progressive relationships. To ensure that this occurs, the very low-income limits have been used as the basis for deriving other income limits unless that relevant statutory language has no references or relationship to low- and very low-income limits as defined by the U.S. Housing Act of 1937. If this were not done, for instance, HUD low-income limits would be less than very low-income limits in areas where very low-income limits had been adjusted upward by more than 60 percent because of unusually low area median family incomes relative to the Section 8 Fair Market Rents (FMRs).
Very low-income limits are calculated using a set of formulae as follows. The first step is to calculate a four-person income limit equal to 50 percent of the area median family income. Adjustments are then made if this estimate is outside formula constraints. More specifically, the very low-income limit for a four-person family is calculated as follows:
(1) 50 percent of the area median family income is calculated and set as the preliminary four-person family income limit;
(2) the four-person very low-income limit is increased if it would otherwise be less than the amount at which 35 percent of it equals 85 percent of the annualized two-bedroom 40th percentile rent. This adjusts income limits upward for areas where rental housing costs are unusually high in relation to the median income;
(3) the four-person very low-income limit is reduced to the greater of 80 percent of the U.S. median family income level, or the amount at which 30 percent of a four-person family's income equals 100 percent of the two-bedroom 40th percentile rent. This adjusts income limits downward for areas of unusually high median family incomes;
(4) the four-person income limit is increased if it is less than 50 percent of the relevant state non-metropolitan median family income level,3 and;
(5) the four-person income limit is increased if it is less than 95 percent of last year's very low-income limit and reduced to the greater of 105 percent of last year’s very low-income limit or twice the change in the national median family income estimate if that amount would be larger than 5 percent. Between FY 2018 and FY 2019, the estimate of national median family income increased and the change in income limits is capped at 110 percent of last year's very lowincome limit. HUD uses 40th percentile rents instead of FMRs that include 50th percentile areas, to calculate high housing cost areas. This is to create a uniform national standard for the relationship between the rent and income distributions in defining the high- and low-housing cost adjustments, and, in the past, to prevent fluctuations in Low-Income Housing Tax Credit Difficult Development Area (DDA) determinations that result solely from high housing cost income limit fluctuations as areas go in and out of the 50th percentile FMR program. Beginning with the FY 2018 FMRs, no additional 50th percentile areas can be designated, so this use of 40th percentile rents only impacts the few remaining areas where the three-year 50th percentile FMR has not expired. For FY 2019, only three areas continue to use 50th percentile FMRs, Bergen-Passaic, NJ HMFA, San DiegoCarlsbad, CA MSA, and Spokane, WA HMFA. FY 2019 is the last year for 50th percentile FMRs.
Table 1 summarizes the rules governing very low-income limit determinations:
Table 1 Summary of Income Limits Determinations for FY 2019 Very Low-income Limits
| Type Income Limit Calculation | Non-metro Counties | Metropolitan Areas | |
| 1 | Limits based on 50% of local median family income | 579 | 383 |
| 2 | Limits based on State non-metropolitan median family income level | 1292 | 123 |
| 3 | Limits increased to the amount at which 35% of 4-person family's income equals 85% of the 2-bedroom 40th percentile rent | 15 | 31 |
| 4 | Limits decreased to the greater of 80% of the U.S. median family income or the amount at which 30% of a 4-person family's income equals 100% of the 2- bedroom 40th percentile rent | 1 | 0 |
| 5 | Limits floored if they would be less than 95% of last year's limit | 19 | 11 |
| 6 | Limits capped if they would otherwise increase by more than twice the increase in the National Median Income (i.e., would be more than 110% of last year's limit) | 67 | 77 |
| 7 | TOTALS | 1973 | 625 |
Footnotes:
3 A Housing and Community Development Act of 1987 amendment directed that non-metropolitan area income limits should never be set at less than if they were based on the State non-metropolitan median family income level. In implementing this provision, HUD used its discretion to apply this policy to metropolitan areas to avoid inequities that would otherwise result. Doing so avoids the anomaly of assigning higher income limits to a non-metropolitan county than are assigned to an adjacent metropolitan area where the median family income is less than the State non-metro level but above the level for the non-metro county.
Most four-person low-income limits are the higher of: (a) 80 percent of the area median family income, or (b) 80 percent of the State non-metropolitan median family income level. Because the very low-income limits are not always based on 50 percent of median, strictly calculating low-income limits as 80 percent of median could produce anomalies inconsistent with statutory intent (e.g., very low-income limits could be higher than low-income limits). The calculation normally used, therefore, is to set the four-person low-income limit at 1.6 (i.e., 80%/50%) times the relevant four-person very low-income limit. The only exceptions are that the resulting income limit may not exceed the U.S. median family income level ($75,500 for FY 2019) except when justified by high housing costs; and once adjusted, the fourperson low-income limit decrease is limited to five percent or, if increasing, capped at the greater of five percent or twice the national change in median income (which is 10 percent for FY 2019). Use of very low-income limits as a starting point for calculating other income limits tied to Section (3)(b)(2) of the U.S. Housing Act of 1937 has the effect of adjusting low-income limits in areas where the very low-income limits have been adjusted because of unusually high or low housingcost-to-income relationships.
Table 2 summarizes the rules governing low-income limit determinations and how many areas are affected by each provision:
Table 2 Summary of Income Limits Determinations for FY 2019 Low-income Limits
HUD has adjusted low-income limits for areas of unusually high or low income since passage of the 1974 legislation that established the basic income limit system now used. Underlying the decision to set minimum and maximum low-income limits is the assumption that families in unusually poor areas should be defined as low-income if they are unable to afford standard quality housing even if their incomes exceed 80 percent of the local median family income. Similarly, families in unusually affluent areas are not considered low-income even if their income is less than 80 percent of the local median family income level unless justified by area housing costs.
HUD uses 40th percentile rents instead of FMRs that include 50th percentile rents in some areas, to calculate high housing cost areas. This is to create a uniform national standard for the relationship between the rent and income distributions in defining the high- and low-housing cost adjustments, and, in the past, to prevent fluctuations in Low-Income Housing Tax Credit Difficult Development Area (DDA) determinations that result solely from high housing cost income limit fluctuations as areas go in and out of the 50th percentile FMR program. Beginning with the FY 2018 FMRs, no additional 50th percentile areas can be designated, so this use of 40th percentile rents only impacts the few remaining areas where the three-year 50th percentile FMR has not expired. All three of these areas will expire at the end of FY 2019.
Table 2 summarizes the rules governing low-income limit determinations and how many areas are affected by each provision:
Table 2 Summary of Income Limits Determinations for FY 2019 Low-income Limits
| Type Income Limit Calculation | Non-metro Counties | Metropolitan Areas | |
| 1 | Limits based proportional increases from very low-income limits (i.e., set at 80/50ths of the very low-income limits) | 568 | 349 |
| 2 | Limits based on State nonmetropolitan median family income level | 1292 | 118 |
| 3 | Four-person base low-income limit capped at the U.S. median of $75,500 | 16 | 36 |
| 4 | Limits increased for high housing costs | 19 | 35 |
| 5 | Limits floored if they would otherwise be less than 95% of last year's low-income limit | 19 | 12 |
| 6 | Limits capped if they would otherwise increase by more than twice the increase in the National Median Income (i.e., would be more than 110% of last year's limit) | 59 | 75 |
| Totals | 1973 | 625 |
HUD has adjusted low-income limits for areas of unusually high or low income since passage of the 1974 legislation that established the basic income limit system now used. Underlying the decision to set minimum and maximum low-income limits is the assumption that families in unusually poor areas should be defined as low-income if they are unable to afford standard quality housing even if their incomes exceed 80 percent of the local median family income. Similarly, families in unusually affluent areas are not considered low-income even if their income is less than 80 percent of the local median family income level unless justified by area housing costs.
HUD uses 40th percentile rents instead of FMRs that include 50th percentile rents in some areas, to calculate high housing cost areas. This is to create a uniform national standard for the relationship between the rent and income distributions in defining the high- and low-housing cost adjustments, and, in the past, to prevent fluctuations in Low-Income Housing Tax Credit Difficult Development Area (DDA) determinations that result solely from high housing cost income limit fluctuations as areas go in and out of the 50th percentile FMR program. Beginning with the FY 2018 FMRs, no additional 50th percentile areas can be designated, so this use of 40th percentile rents only impacts the few remaining areas where the three-year 50th percentile FMR has not expired. All three of these areas will expire at the end of FY 2019.
The Quality Housing and Work Responsibility Act of 1998 established a new income limit standard based on 30 percent of median family income (the extremely low-income limits), which was to be adjusted for family size and for areas of unusually high or low family income. A statutory change was made in 1999 to clarify that these income limits should be tied to the Section 8 very low-income limits. The Consolidated Appropriations Act, 2014 further modified and redefined these limits as Extremely Low Family income limits to ensure that these income limits would not fall below the poverty guidelines determined for each family size. Specifically, extremely lowincome families are defined to be very low-income families whose incomes are the greater of the Poverty Guidelines as published and periodically updated by the Department of Health and Human Services or the 30 percent income limits calculated by HUD. Puerto Rico and other territories are specifically excluded from this adjustment. There are separate poverty guidelines for Alaska and Hawaii. The remaining 48 states and the District of Columbia use the same poverty guidelines. The extremely low-income limits therefore are first calculated as 30/50ths (60 percent) of the Section 8 very low-income limits. They are then compared to the appropriate poverty guideline and if the poverty guideline is higher, that value is chosen. If the poverty guideline is above the very lowincome limit at that family size, the extremely low-income limit is set at the very low-income limit because the definition of extremely low-income limits caps them at the very low-income levels.
The income limit statute requires adjustments for family size. The legislative history and conference committee report indicates that the Congress intended that income limits should be higher for larger families and lower for smaller families. The same family size adjustments are used for all income limits, except extremely low-income limits set at the poverty income threshold. They are as follows:
Income limits for families with more than eight persons are not included in the printed lists because of space limitations. For each person over eight-persons, the four-person income limit should be multiplied by an additional 8 percent. (For example, the nine-person limit equals 140 percent [132 + 8] of the relevant four-person income limit.) Income limits are rounded up to the nearest $50. Local agencies may round income limits for nine or more persons to the nearest $50, or they may use the un-rounded numbers. Family size-adjusted income limits are not re-tested for compliance with the cap and floor rules, as discussed below. Rounding anomalies produce some family size-adjusted income limits whose annual change may lead to a decrease of more than five percent or an increase of more than the 11.5 percent allowed for FY 2018 income limits.
Due to the extremely low-income definition changes, these family size adjustments are no longer sufficient to determine the level of extremely low-income limits. The poverty guidelines have fixed dollar amount adjustments between household sizes (different for Alaska and Hawaii than the rest of the U.S.). Therefore, the actual amounts shown for 1- to 8-person families will not necessarily follow the percentages shown above. For families with more than 8 persons, HUD has developed a tool that should be used to calculate the extremely low-income limit for that area at http://www.huduser.gov/portal/datasets/il/il19/index.html. Please use the FY 2019 Income Limits Documentation system, pick the area in question, and select "Click Here" under the label "Extremely Low-Income Limits." Near the bottom of the explanations, there is a drop-down box to select the number of household members needed (from 9 to 20).
| Number of Persons in Family and Percentage Adjustments | |||||||
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| 70% | 80% | 90% | Base | 108% | 116% | 124% | 132% |
Income limits for families with more than eight persons are not included in the printed lists because of space limitations. For each person over eight-persons, the four-person income limit should be multiplied by an additional 8 percent. (For example, the nine-person limit equals 140 percent [132 + 8] of the relevant four-person income limit.) Income limits are rounded up to the nearest $50. Local agencies may round income limits for nine or more persons to the nearest $50, or they may use the un-rounded numbers. Family size-adjusted income limits are not re-tested for compliance with the cap and floor rules, as discussed below. Rounding anomalies produce some family size-adjusted income limits whose annual change may lead to a decrease of more than five percent or an increase of more than the 11.5 percent allowed for FY 2018 income limits.
Due to the extremely low-income definition changes, these family size adjustments are no longer sufficient to determine the level of extremely low-income limits. The poverty guidelines have fixed dollar amount adjustments between household sizes (different for Alaska and Hawaii than the rest of the U.S.). Therefore, the actual amounts shown for 1- to 8-person families will not necessarily follow the percentages shown above. For families with more than 8 persons, HUD has developed a tool that should be used to calculate the extremely low-income limit for that area at http://www.huduser.gov/portal/datasets/il/il19/index.html. Please use the FY 2019 Income Limits Documentation system, pick the area in question, and select "Click Here" under the label "Extremely Low-Income Limits." Near the bottom of the explanations, there is a drop-down box to select the number of household members needed (from 9 to 20).
Since FY 20104 HUD has limited all annual income limit decreases to five percent and all annual increases to the greater of five percent or twice the change in the national median income.
Specifically, the low-income and very low-income four-person limits will not be allowed to decrease more than five percent or increase more than five percent or twice the national increase in median family income, whichever of those is larger The national median income for the United States for FY 2019 is $75,500, an increase of five percent over the national median income in FY 2018. Twice this change is 10 percent which is greater than five percent, so this higher value is used as the cap on increases. The cap and floor rules do not apply to the extremely low-income limits where these are set according to the poverty threshold.
This policy was implemented in the following way:
Footnotes:
4Prior to FY 2010, HUD maintained a "hold harmless" policy, whereby Section 8 income limits for certain areas were held at previously published levels when reductions would otherwise have resulted from changes in housing cost, median income, or income limit methodologies, or changes in metropolitan area definitions.
Specifically, the low-income and very low-income four-person limits will not be allowed to decrease more than five percent or increase more than five percent or twice the national increase in median family income, whichever of those is larger The national median income for the United States for FY 2019 is $75,500, an increase of five percent over the national median income in FY 2018. Twice this change is 10 percent which is greater than five percent, so this higher value is used as the cap on increases. The cap and floor rules do not apply to the extremely low-income limits where these are set according to the poverty threshold.
This policy was implemented in the following way:
- The four-person very-low income limit is computed as half of the local median family income. Median family incomes are rounded to 100 so, by definition, the raw four-person income limit is rounded to 50.
- The cap for the four-person very low-income limit is last year's four-person very lowincome limit multiplied by the greater of 1.05 or twice the change in the national median family income (which is higher at 1.10%) and rounded down to the nearest $50. The cap is rounded down to ensure that it is less than or equal to last year's four-person very low income limit times this cap.
- The floor for the four-person very low-income limit is last year’s four-person very lowincome limit multiplied by 0.95 and rounded up to the nearest $50. The floor is rounded up to ensure that it is greater than or equal to 95 percent of last year's four-person very lowincome limit.
- If the otherwise adjusted four-person very low-income limit is above the cap, then it is set at the cap. If it is below the floor, then it is set at the floor.
- Family size adjustments are made to the floored/capped four-person very low-income limit.
- No additional adjustments are made to families of more than or less than four persons for the very low-income limit, except that it is then rounded up to the nearest $50.
- The cap and floor are applied in an analogous way to the four-person low-income limit.
- No additional capping or flooring is done to any income limit based on either the very lowincome limit or the low-income limit.
- Family size adjusted limits may be slightly larger or smaller than the cap or floor imposed on the four-person low- and very low-income limits due to rounding.
Footnotes:
4Prior to FY 2010, HUD maintained a "hold harmless" policy, whereby Section 8 income limits for certain areas were held at previously published levels when reductions would otherwise have resulted from changes in housing cost, median income, or income limit methodologies, or changes in metropolitan area definitions.
HUD income limits apply to the following programs:
| Program | Income Limits Standard |
| Department of Housing and Urban Development | |
| Public Housing | Very low -income, low-income standards, or extremely low-income limits |
| All Section 8 Programs | Very low-income, low-income standards, or extremely low-income limits |
| Indian Housing (1996 Act) | "Low-Income" is defined as the greater of 80 percent of the median family income for the Indian area or of the U.S. national median family income |
| Section 202 Elderly and Section 811 Handicapped programs | Very low-income or low-income standards |
| Section 235 (Homeownership program) | "95 percent" of area median income, or higher costbased income limits |
| Section 236 (Rental program) | Low-income standard |
| Section 221(d)(3) (BMIR)(Below Market Interest Rate) rental program | "95 percent" of area median income, defined as 95/80ths of low-income definition |
| Community Planning and Development programs | Very low-income or low-income standards for current programs under management |
| HOME Investment Partnerships Act of 1990 | "60 percent of median" and "65 percent of median" are used as income targeting and qualification requirements; both limits are tied to Section 8 income limit determinations |
| National Homeownership Trust Act of 1990 | "95 percent" of median is referenced as the eligibility standard, with a "115 percent" of median standard for high cost areas |
| Low-Income Housing Preservation and Resident Homeownership Act of 1990 | Affordability of units for current occupant of "moderate income" affects terms under which mortgage may be prepaid; "moderate income" is defined as 80-95 percent of median, with "80 percent" defined as the Section 8 low-income standard |
| Rural Housing and Community Development Service | |
| Rental and ownership assistance programs | Assistance based on HUD Section 8 very low-income or low-income standards, or income limits tied to these standards |
| Treasury Programs | |
| Multifamily Tax Subsidy Projects | Current standard is Section 8 very low-income standard or 120 percent of that definition (i.e., the "60 percent" of median standard) for projects determining income eligibility and rents who haven't used income limits prior to FY 2012. Income Limits for projects using income limits in FY 2010 or earlier will no longer use Section 8 Income Limits. A separate income limits publication is produced for this program. |
| Tax-exempt Mortgage Revenue Bonds for homeownership financing | 115 percent of area median income, with "115 percent" defined as 230 percent of the Section 8 very low-income standard |
| "Difficult Development Area" Designation (Low-Income Housing Tax Credit) | Areas with the worst housing cost problems as measured by the FMR to 60 percent of median family income ratio; this designation is awarded to the population-weighted 20 percent of the metro and non-metro areas (using HUD area definitions) with the most severe problems and is recalculated annually; such areas receive special additional tax benefits under this program |
| "Qualified Census Tract" (Low-Income Housing Tax Credit Program Definition) | Areas, as defined by the Census and designated by HUD, where 50% of all households have incomes less than 60 percent of the area median family income, adjusted for household size, or the poverty rate is 25 percent or higher; such areas receive special additional tax benefits under this program; this calculation is based on 2010 Census data and income limit policies and area definitions in effect as of the date estimates are prepared |
| "Qualified Census Tract" (Mortgage Revenue Bond Program) | Areas, as defined by the Census, where 70 percent of all families have incomes less that 80 percent of the state median family income, based on 2010 Census data |
| Federal Deposit Insurance Corporation | |
| Disposition of Multifamily Housing to Non-profit and Public Agencies | Not less than 35 percent of all dwelling units must be made available for occupancy and be affordable for lowincome families, and at least 20 percent must be made available for occupancy and be affordable for very lowincome families. An "affordable rent" is defined as the rent that would be paid by a family paying 30 percent of income for rent whose income is "65 percent of median". This 65 percent figure is defined in relation to the very low-income standard (i.e., normally as 65/50ths of the standard) |
| Disposition of Single Family Housing | For rentals, priority is given to non-profits and public agencies that make the dwellings affordable to lowincome households. Households who intend to occupy a dwelling as their primary residence whose adjusted income does not exceed 115 percent of area median income, as determined by the Secretary of HUD, are given a purchase priority for the first 3 months a property is for sale. |
| Federal Home Loan Banks | |
| Rental program funding Priorities | Very low-income, "60 percent of median" (defined as 120 percent of very low-income), and low-income standards used |
| Homeownership funding priorities | 115 percent and 140 percent of median family income limits are used |
| Federal Housing Finance Agency | |
| Income-based Housing Goals of Freddie Mac and Fannie Mae | Goals for percentages of loans are established for households with incomes at or below specified percentages of the HUD-published median family income for metropolitan and nonmetropolitan areas, as detailed in 12 CFR, Part 1282. The area definitions used relate to OMB metropolitan area definitions and the median family income estimates for the nonmetropolitan portions of each state. |
| Other Federal Banking Regulatory Provisions | |
| Targeting of loan funds to low-income households and areas | Varies by agency |
| Uniform Relocation Act | |
| Reimbursement to households forced to relocate from their residence by Federal agency | Extent of replacement housing assistance dependent on qualifying as low-income, as defined by HUD; Act applies to all Federal agencies that initiate action that forces households to relocate from their residence |
| Department of Veterans Affairs | |
| Eligibility for disability income support payments to veterans | Eligibility for non-service related income support payments is restricted to families with incomes below the HUD low-income standard |
(a)(1) Dwelling units assisted under this Act shall be rented only to families who are low-income families at the time of their initial occupancy of such units.....
(b) When used in this Act:
(1) The term "low-income housing" means decent, safe, and sanitary dwellings assisted under this Act....
(2)(A) The term "low-income families" means those families whose incomes do not exceed 80 per centum of the median income for the area, as determined by the Secretary with adjustments for smaller and larger families, except that the Secretary may establish income ceiling higher or lower than 80 per centum of the median for the area on the basis of the Secretary's findings that such variations are necessary because of prevailing levels of construction costs or unusually high or low family incomes.
(B) The term "very low-income families" means lower income families whose incomes do not exceed 50 per centum of the median family income for the area, as determined by the Secretary with adjustments for smaller and larger families, except that the Secretary may establish income ceilings higher or lower than 50 per centum of the median for the area on the basis of the Secretary's findings that such variations are necessary because of unusually high or low family incomes.
C) The term extremely low-income families means very low-income families whose incomes do not exceed the higher of--
(i) the poverty guidelines updated periodically by the Department of Health and Human Services under the authority of section 673(2) of the Community Services Block Grant Act applicable to a family of the size involved (except that this clause shall not apply in the case of public housing agencies or projects located in Puerto Rico or any other territory or possession of the United States); or
(ii) 30 percent of the median family income for the area, as determined by the Secretary, with adjustments for smaller and larger families (except that the Secretary may establish income ceilings higher or lower than 30 percent of the median for the area on the basis of the Secretary's findings that such variations are necessary because of unusually high or low family incomes)
(D) Such ceilings shall be established in consultation with the Secretary of Agriculture for any rural area, as defined in section 520 of the Housing Act of 1949, taking into account the subsidy characteristics and types of programs to which such ceilings apply. In determining median incomes (of persons, families, or households) for an area or establishing any ceilings or limits based on income under this Act, the Secretary shall determine or establish area median incomes and income ceilings and limits for Westchester and Rockland Counties, in the State of New York, as if each such county were an area not contained within the metropolitan statistical area in which it is located. In determining such area median incomes or establishing such income ceilings or limits for the portions of such metropolitan statistical area that does not include Westchester or Rockland Counties, the Secretary shall determine or establish area median incomes and income ceilings and limits as if such portion included Westchester and Rockland Counties. In determining areas that are designated as difficult development areas for the purposes of the low-income housing tax credit, the Secretary shall include Westchester and Rockland Counties, New York, in the New York City metropolitan area.
(b) When used in this Act:
(1) The term "low-income housing" means decent, safe, and sanitary dwellings assisted under this Act....
(2)(A) The term "low-income families" means those families whose incomes do not exceed 80 per centum of the median income for the area, as determined by the Secretary with adjustments for smaller and larger families, except that the Secretary may establish income ceiling higher or lower than 80 per centum of the median for the area on the basis of the Secretary's findings that such variations are necessary because of prevailing levels of construction costs or unusually high or low family incomes.
(B) The term "very low-income families" means lower income families whose incomes do not exceed 50 per centum of the median family income for the area, as determined by the Secretary with adjustments for smaller and larger families, except that the Secretary may establish income ceilings higher or lower than 50 per centum of the median for the area on the basis of the Secretary's findings that such variations are necessary because of unusually high or low family incomes.
C) The term extremely low-income families means very low-income families whose incomes do not exceed the higher of--
(i) the poverty guidelines updated periodically by the Department of Health and Human Services under the authority of section 673(2) of the Community Services Block Grant Act applicable to a family of the size involved (except that this clause shall not apply in the case of public housing agencies or projects located in Puerto Rico or any other territory or possession of the United States); or
(ii) 30 percent of the median family income for the area, as determined by the Secretary, with adjustments for smaller and larger families (except that the Secretary may establish income ceilings higher or lower than 30 percent of the median for the area on the basis of the Secretary's findings that such variations are necessary because of unusually high or low family incomes)
(D) Such ceilings shall be established in consultation with the Secretary of Agriculture for any rural area, as defined in section 520 of the Housing Act of 1949, taking into account the subsidy characteristics and types of programs to which such ceilings apply. In determining median incomes (of persons, families, or households) for an area or establishing any ceilings or limits based on income under this Act, the Secretary shall determine or establish area median incomes and income ceilings and limits for Westchester and Rockland Counties, in the State of New York, as if each such county were an area not contained within the metropolitan statistical area in which it is located. In determining such area median incomes or establishing such income ceilings or limits for the portions of such metropolitan statistical area that does not include Westchester or Rockland Counties, the Secretary shall determine or establish area median incomes and income ceilings and limits as if such portion included Westchester and Rockland Counties. In determining areas that are designated as difficult development areas for the purposes of the low-income housing tax credit, the Secretary shall include Westchester and Rockland Counties, New York, in the New York City metropolitan area.
Sec. 16. (a) Income Eligibility for Public Housing
(2)(A) Targeting. - Except as provided in paragraph 4, of the public housing dwelling units of a public housing agency made available for occupancy in any fiscal year by eligible families, not less than 40 percent shall be occupied by extremely low-income families.
(4)(D) Fungibility Floor. - Notwithstanding any authority under subparagraph (A), of the public housing dwelling units of a public housing agency made available for occupancy in any fiscal year by eligible families, not less than 30 percent shall be occupied by families whose incomes at the time of commencement of occupancy do not exceed 30 percent of the area median income, as determined by the Secretary with adjustments for smaller and larger families; except that the Secretary may establish income ceilings higher or lower than 30 percent of the area median income on the basis of the Secretary’s findings that such variations are necessary because of unusually high or low family incomes.
Sec. 16. (b) Income eligibility for Tenant-Based Section 8 Assistance
(1) IN GENERAL. - Of the families initially provided tenant-based assistance under section 8 by a public housing agency in any fiscal year, not less than 75 percent shall be extremely lowincome families.
Sec. 16. (c) Income Eligibility for Project-Based Section 8 Assistance
(1) Pre-1981 Act Projects. - Not more than 25 percent of the dwelling units that were available for occupancy under section 8 housing assistance payments contracts under this Act before the effective date of the Housing and Community Development Amendments of 1981, and which will be leased on or after such effective date shall be available for leasing by lower income families other than very low-income families.
(2) Post-1981 Act Projects. - Not more than 15 per cent of the dwelling units which became available for occupancy under section 8 housing assistance payments contracts under this Act on or after the effective date of the Housing and Community Development Amendments of 1981 shall be available for leasing by lower income families other than very low-income families.
(3) Targeting. - For each project assisted under a contract for project-based assistance, of the dwelling units that become available for occupancy in any fiscal year that are assisted under the contract, not less than 40 percent shall be available for leasing only by extremely low-income families.
(5) Exception. - The limitations established in paragraphs (1), (2), and (3) shall not apply to dwelling units made available under project-based contracts under section 8 for the purpose of preventing displacement, or, ameliorating the effects of displacement.
Section 567 of the HCD Act of 1987 Amendment Affecting Section 3 of the 1937 Act:
"For purposes of calculating the median income for any area that is not within a metropolitan statistical area (as established by the Office of Management and Budget) for programs under title I of the Housing and Community Development Act of 1974, the United States Housing Act of 1937, the National Housing Act, or title V of the Housing Act of 1949, the Secretary of Housing and Urban Development or the Secretary of Agriculture (as appropriate) shall use whichever of the following is higher:
(1) the median income of the county in which the area is located; or,
(2) the median income of the entire non-metropolitan area of the State.
(2)(A) Targeting. - Except as provided in paragraph 4, of the public housing dwelling units of a public housing agency made available for occupancy in any fiscal year by eligible families, not less than 40 percent shall be occupied by extremely low-income families.
(4)(D) Fungibility Floor. - Notwithstanding any authority under subparagraph (A), of the public housing dwelling units of a public housing agency made available for occupancy in any fiscal year by eligible families, not less than 30 percent shall be occupied by families whose incomes at the time of commencement of occupancy do not exceed 30 percent of the area median income, as determined by the Secretary with adjustments for smaller and larger families; except that the Secretary may establish income ceilings higher or lower than 30 percent of the area median income on the basis of the Secretary’s findings that such variations are necessary because of unusually high or low family incomes.
Sec. 16. (b) Income eligibility for Tenant-Based Section 8 Assistance
(1) IN GENERAL. - Of the families initially provided tenant-based assistance under section 8 by a public housing agency in any fiscal year, not less than 75 percent shall be extremely lowincome families.
Sec. 16. (c) Income Eligibility for Project-Based Section 8 Assistance
(1) Pre-1981 Act Projects. - Not more than 25 percent of the dwelling units that were available for occupancy under section 8 housing assistance payments contracts under this Act before the effective date of the Housing and Community Development Amendments of 1981, and which will be leased on or after such effective date shall be available for leasing by lower income families other than very low-income families.
(2) Post-1981 Act Projects. - Not more than 15 per cent of the dwelling units which became available for occupancy under section 8 housing assistance payments contracts under this Act on or after the effective date of the Housing and Community Development Amendments of 1981 shall be available for leasing by lower income families other than very low-income families.
(3) Targeting. - For each project assisted under a contract for project-based assistance, of the dwelling units that become available for occupancy in any fiscal year that are assisted under the contract, not less than 40 percent shall be available for leasing only by extremely low-income families.
(5) Exception. - The limitations established in paragraphs (1), (2), and (3) shall not apply to dwelling units made available under project-based contracts under section 8 for the purpose of preventing displacement, or, ameliorating the effects of displacement.
Section 567 of the HCD Act of 1987 Amendment Affecting Section 3 of the 1937 Act:
"For purposes of calculating the median income for any area that is not within a metropolitan statistical area (as established by the Office of Management and Budget) for programs under title I of the Housing and Community Development Act of 1974, the United States Housing Act of 1937, the National Housing Act, or title V of the Housing Act of 1949, the Secretary of Housing and Urban Development or the Secretary of Agriculture (as appropriate) shall use whichever of the following is higher:
(1) the median income of the county in which the area is located; or,
(2) the median income of the entire non-metropolitan area of the State.
