Effective April 01, 2024.
This document explains the Fiscal Year (FY) 2024 Income Limits (ILs) and how they are developed for different areas across the United States. These income limits are crucial for determining eligibility for various housing assistance programs. While official Income Limits are available in PDF and Excel formats at this link, this document provides a detailed explanation and should be used for informational purposes.
NOTE: It’s important to note that due to the Housing and Economic Recovery Act of 2008, the data here may not apply to projects financed with Section 42 Low Income Housing Tax Credits (LIHTC) or section 142 tax-exempt private equity bonds. For these projects, please refer to the Multifamily Tax Subsidy Project Income Limits available at Multifamily Tax Subsidy Project Income Limits.
2024 Income Limit Documents and Data
Effective April 01, 2024, and June 01, 2024, various income limit documents and data are in effect. These include:
- Median Family Incomes
- Section 8 Income Limits
- Section 221(d)(3) BMIR, Section 235, and Section 236 Income Limits
- State Income Limits and Median Family Incomes
- HUD 30% Income Limit for ALL Areas
- Data for Emergency Solutions Grant (ESG) – Tables for HUD 30% Income Limits (Effective June 01, 2024)
These documents and datasets are essential for understanding the income thresholds for different housing programs and areas.
Frequently Asked Questions about Income Limits
This section addresses common questions about how income limits are calculated and their implications.
Median Family Incomes
Q1. How does HUD calculate median family incomes?
HUD calculates the FY 2024 median incomes using 2022 Census Bureau American Community Survey (ACS) data for most regions. The process involves evaluating the statistical validity of ACS estimates of median family income. An estimate is valid if its margin of error is less than half its size and is based on at least 100 observations.
For areas with statistically valid survey estimates using 2022 one-year ACS data, that data is used. If not, statistically valid 2022 five-year data is utilized. When statistically valid five-year data isn’t available, HUD averages minimally statistically valid income estimates from the previous three years of ACS data (2022, 2021, and 2020). Minimal statistical validity refers to ACS estimates where the margin of error is less than half the estimate’s size. These averaged 5-year data are adjusted to 2022 dollars using the national change in the Consumer Price Index (CPI).
Finally, for all locations in the U.S., including Puerto Rico, the estimates (whether from one-year or five-year data) are inflated from 2022 to Fiscal Year 2024 using the Consumer Price Index forecast from the Congressional Budget Office.
For more detailed information on the use of ACS in HUD’s Median Family Income calculations, refer to the FY 2024 Median Family Income methodology document available at https://www.huduser.gov/portal/datasets/il.html#2024_data.
Complete documentation for Median Family Income calculations is available in the FY 2024 Median Family Income and the FY 2024 Income Limits Documentation System, accessible at https://www.huduser.gov/portal/datasets/il.html#2024_query.
Q2. What is the difference between HUD’s Median Family Income (MFI) and Area Median Income (AMI)?
HUD annually estimates Median Family Income (MFI) for each metropolitan area and non-metropolitan county. These metropolitan area definitions are consistent with those used for Fair Market Rents, except where legally required otherwise. Income Limits are then calculated based on the area’s MFI. HUD’s MFI data originates from the American Community Survey, specifically table B19113 – MEDIAN FAMILY INCOME IN THE PAST 12 MONTHS.
Area Median Income (AMI) is a more general term in the affordable housing sector and is often used interchangeably with HUD’s MFI when unqualified. However, when AMI is qualified—for instance, as percentages of AMI or AMI adjusted for family size—it typically refers to HUD’s income limits. These income limits are calculated as percentages of median incomes and adjusted for different family sizes. For the Average Income Family, understanding whether programs refer to MFI or AMI is crucial for determining eligibility.
Income Limits
Q3. What is the limit on increases and decreases to income limits for FY 2024?
Since FY 2010, HUD has capped annual decreases in low- and very low-income limits at five percent. Annual increases are capped at the greater of five percent or twice the change in the national median family income. For 2024 onwards, the cap is measured using the annual change in the unadjusted national median family income, with an absolute cap of 10 percent. This methodology was announced on January 10, 2024, in a Federal Register Notice.
For FY 2024, the annual change is measured by the ACS from 2021 to 2022. Twice this change is about 14.8 percent, but the income limits “cap” is set at 10 percent for FY 2024. This cap helps to ensure more stability in income limits and rent adjustments.
Q4. Is HUD raising rents on low-income tenants?
Changes in income limits can have varying impacts depending on the housing program. Many tenants in federally supported housing will not see rent changes as their rents are often directly linked to their incomes. However, for programs like Low Income Housing Tax Credits (LIHTC), maximum allowed rents are based on HUD’s published income limits.
It is important to note that the federal government does not control how individual LIHTC landlords set rents within the allowed range. HUD has not mandated or suggested rent increases. Any rent increases by property owners should be minimal, phased in gradually, and only to the extent necessary for the property’s financial stability. For average income families living in these types of properties, it’s essential to understand how income limit changes might indirectly affect rent adjustments.
Q5. Why don’t the income limits for my area reflect recent economic changes?
While HUD uses the most recent available data on local area incomes, there is always a time lag between data collection and its application. For example, FY 2024 Income Limits are calculated using 2017-2021 5-year American Community Survey (ACS) data, and one-year 2021 data where available. This two-year lag means that very current income trends may not be reflected in the latest income limits. This lag is important to understand for average income families when considering the relevance of income limits to their current financial situation.
Q6. Why doesn’t my very low-income limit equal 50% of my median family income (or my low-income limit not equal 80% of my median income)?
Income limit calculations involve several adjustments and exceptions beyond simple arithmetic. These include adjustments for high housing costs relative to income, application of state nonmetropolitan income limits in lower-income areas, and national maximums in higher-income areas.
These exceptions are detailed in the FY 2024 Income Limits Methodology Document, available at https://www.huduser.gov/portal/datasets/il.html#2024_data. Tables 1 and 2 also indicate that most nonmetropolitan area income limits are based on state nonmetropolitan area medians.
For specific adjustments in any area, consult the FY 2024 Income Limits Documentation System at https://www.huduser.gov/portal/datasets/il.html#2024_query. Selecting a specific area will display a summary of median income, Very Low-Income, Extremely Low-Income, and Low-Income Limits, with detailed calculations available via relevant links. Average income families curious about the specific income limits in their area can use this system for detailed information.
Q7. Why is the Extremely Low-Income Limit sometimes the same as the Very Low-Income Limit?
The Quality Housing and Work Responsibility Act of 1998 introduced the extremely low-income limit, set at 30 percent of median family income, adjusted for family size and area income levels. A 1999 clarification tied these limits to Section 8 very low-income limits.
The Consolidated Appropriations Act, 2014 further redefined extremely low family income limits to ensure they do not fall below the poverty guidelines set by the Department of Health and Human Services. Extremely low-income families are defined as very low-income families with incomes at least as high as the Poverty Guidelines or 30 percent income limits calculated by HUD, whichever is greater. This adjustment excludes Puerto Rico and other territories. Alaska and Hawaii have separate poverty guidelines, while the remaining 48 states and D.C. use the same guidelines.
Extremely low-income limits are initially calculated as 30/50ths (60 percent) of Section 8 very low-income limits. They are then compared to the poverty guideline. If the poverty guideline is higher, that value is used, capped at the very low-income limit.
Starting in FY 2023, HUD set the extremely low-income limit at the very low-income limit level for Puerto Rico to increase assistance eligibility in HUD programs targeting extremely low-income households. This complex calculation process ensures that the most vulnerable families receive adequate support, and understanding these nuances is important even for average income families to appreciate the broader housing assistance landscape.
Q8. Why can’t I access the FY 2024 Income Limits Documentation System using old bookmarks or web searches?
The Income Limits Documentation System calculates median family incomes and income limits based on specific parameters. To ensure correct calculations, access the FY 2024 system using this direct link: https://www.huduser.gov/portal/datasets/il.html#2024_query. Using prior year bookmarks or search results may lead to broken pages as the system is year-specific.
Area Definitions
Q9. Why do area definitions change for median incomes and income limits?
HUD uses Office of Management and Budget (OMB) definitions of metropolitan areas with some exceptions. In 2006, following OMB’s area definition changes based on the 2000 Decennial Census, HUD made exceptions when Fair Market Rent (FMR) or MFI changes exceeded five percent. This led to the creation of HUD Metro FMR Areas (HMFAs).
FY 2024 MFIs and income limits are based on metropolitan area definitions from OMB, updated through 2018 Census commuting relationships. While HMFAs are maintained, the five percent FMR or median income test is no longer applied. Counties added to metropolitan areas become HMFAs with rents and incomes based on their county data, where available. The Area Definitions report at https://www.huduser.gov/portal/datasets/il.html#2024_data details county dispositions. Changes in area definitions can impact how income limits are applied, which can be relevant even for average income families living near changing metropolitan boundaries.
Q10. What is the relationship between Fair Market Rent areas and Income Limit areas?
Fair Market Rent (FMR) areas and Income Limit areas are almost identical. HUD uses FMR areas to calculate income limits partly because FMRs are needed to determine high and low housing cost adjustments. These area definitions are also historically linked. The main exception is Rockland County, NY, where income limits are calculated separately, but not FMRs.
Q11. What does the term “HMFA” mean?
HMFA stands for HUD Metro FMR Area. It indicates that only a portion of an OMB-defined metropolitan statistical area (MSA) is covered by the income limits or FMRs. HUD is required by OMB to modify the names of metropolitan entities derived from MSAs when the geography differs from OMB standards.
Multifamily Tax Subsidy Projects (MTSPs)
Q12. What is the national non-metro median used to calculate the floor on rural LIHTC rents?
Section 3004 of the Housing and Economic Recovery Act (HERA) mandates that residential rental properties in rural areas (defined in section 520 of the Housing Act of 1949) use the greater of the area median gross income or the national non-metropolitan median income. The current non-metropolitan median income and related 50-percent income limits are available at https://www.huduser.gov/portal/datasets/il/il24/FY2024-National-Non-Met-Very-Low-Income-Limits.xlsx.
Q13. What are Multifamily Tax Subsidy Projects?
Multifamily Tax Subsidy Projects (MTSPs) include Low-Income Housing Tax Credit (LIHTC) projects under Section 42 of the Internal Revenue Code and tax-exempt bond-funded multifamily projects under Section 142. These projects often have specific income limits, published separately by HUD. For tax credit developers or MTSP residents, appropriate income limits are available at https://www.huduser.gov/portal/datasets/mtsp.html.
Q14. How can 60 percent income limits be calculated?
For the Low-Income Housing Tax Credit program, refer to the FY 2024 Multifamily Tax Subsidy Project income limits at https://www.huduser.gov/portal/datasets/mtsp.html. These income limits are calculated by taking 120 percent of the Very Low-Income Limit. Do not calculate income limit percentages directly from the median family income due to numerous exceptions in income limit computations.
Q15. How are maximum rents for Low-Income Housing Tax Credit projects computed from the very low-income limits?
Consult the state housing financing agency overseeing the tax credit project for official maximum rental rates. A list of state agencies is at https://lihtc.huduser.gov/agency_list.htm. The Low-Income Housing Tax Credit program is managed by the U.S. Treasury Department, so HUD does not officially set maximum rental rates. The table below is for informational purposes only.
LIHTC Maximum Rent Derivation from HUD Very Low-Income Limits (VLILs)
| Unit Size | 0 Bedroom | 1 Bedroom | 2 Bedroom | 3 Bedroom | 4 Bedroom |
|---|---|---|---|---|---|
| 50% MFI Unit Maximum Monthly Rent is 1/12 of 30% of: | 1-Person VLIL | (1-Person VLIL + 2-Person VLIL)/2 | 3-Person VLIL | (4-Person VLIL + 5-Person VLIL)/2 | 6-Person VLIL |
| 60% MFI Unit Maximum Monthly Rent is 1/12 of 30% of: | 120% of 1-Person VLIL | 120% of [(1-Person VLIL + 2-Person VLIL)/2] | 120% of 3-Person VLIL | 120% of [(4-Person VLIL + 5-Person VLIL)/2] | 120% of 6-Person VLIL |
NOTE: Maximum rents for larger units assume an additional 1.5 persons per bedroom.
FAQs on FY24 Income Limit Cap-on-Cap
What are Income Limits?
HUD publishes annual income limits to determine income eligibility for HUD housing assistance programs. These limits are based on American Community Survey data and other sources. The income limit represents the maximum income a household can earn to qualify for or be targeted for housing assistance. Understanding these income limits is crucial for average income families exploring housing assistance options.
What is new for the income limit methodology in 2024?
A modification has been made to how the annual increase in income limits is capped for any Fair Market Rent (FMR) area (typically metropolitan areas and non-metropolitan counties).
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Existing cap: Since 2009, HUD has limited annual income limit increases to the higher of five percent or twice the percentage change in national median family income.
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New cap: For 2024, the cap is now set at the annual change in national median family income, with an absolute maximum of 10 percent.
The history of annual caps is as follows:
| Year | Cap |
|---|---|
| FY 2010 | 5.00% |
| FY 2011 | 5.00% |
| FY 2012 | 5.00% |
| FY 2013 | 5.00% |
| FY 2014 | 5.00% |
| FY 2015 | 5.95% |
| FY 2016 | 5.00% |
| FY 2017 | 7.00% |
| FY 2018 | 11.47% |
| FY 2019 | 10.01% |
| FY 2020 | 7.95% |
| FY 2021 | 5.00% |
| FY 2022 | 11.89% |
| FY 2023 | 5.92% |
This change was made in consultation with the Treasury Department to refine the income limits methodology, particularly for the LIHTC incentive.
Why is HUD making this “cap-on-cap” change?
The change serves three main purposes:
- Tenant protection: It prevents single-year rent increases exceeding 10 percent in HOME and LIHTC properties, protecting residents from sharp rent hikes due to income limit increases. This is particularly relevant for average income families who may be on the cusp of income limits for certain affordable housing options.
- Statistical error mitigation: Data limitations in some FMR areas can lead to statistical errors, causing income estimate changes that are not reflective of actual economic shifts. The cap helps smooth out income limit adjustments over time.
- Stability and certainty: This methodological change aims to provide greater predictability in future income limit increases, aiding in the financial planning for affordable housing developments. This stability benefits both developers and average income families seeking stable housing costs.
How many areas does the cap impact in 2024?
In FY 2024, the 10 percent cap affects 21 percent of FMR areas.
Does the “cap-on-cap” mean owners of LIHTC properties won’t have enough revenue?
No, it is not expected to significantly impact LIHTC owners’ ability to maintain their properties. LIHTC rules do not require rent reductions when area incomes decrease, nor mandatory rent increases with income limit increases. While property owners face rising operational costs, HUD’s Operating Cost Adjustment Factors indicate that combined cost increases have not exceeded 10 percent in any state.
Financial underwriting for LIHTC properties typically assumes conservative annual rent growth (2-3 percent), well below the 10 percent cap. The cap balances economic pressures on owners with the need to protect low-income residents and mitigate statistical errors. Phasing in rent increases over multiple years can also help manage financial adjustments.
Does this mean developers of LIHTC properties won’t seek credits or build housing?
No, the cap is not expected to reduce the supply of new LIHTC properties nationally. A cap on income limits has been in place since 2009 without evidence of limiting supply. Demand for LIHTC credits remains high. While some developers noted potential impacts on new developments in comments to HUD, the cap is just one factor in LIHTC property financing. Developers typically assume modest rent growth, and the cap helps moderate exceptionally high rent growth in limited areas for a short period. The 10% cap is generous historically, and income limits are expected to adjust in subsequent years.
Will the “cap on cap” mean that people whose incomes are rising faster than income limits will be ineligible for federal housing assistance?
This may affect a small number of households. However, a 10 percent annual cap on income limit increases generally exceeds income growth for households on fixed incomes, including Social Security COLAs. The largest recent Social Security COLA was 8.7 percent in 2022, and only twice in history has it exceeded 10 percent. For the vast majority of average income families and those on fixed incomes, the cap is unlikely to negatively impact their eligibility while providing important protections against rapid rent increases for those in subsidized housing.
This document aims to clarify the complexities of income limits and their relevance to various housing programs, providing essential information for average income families, housing professionals, and policymakers alike.
