Effective April 01, 2024.
This document provides detailed information on how Median Family Income (MFI) is calculated and utilized by the Department of Housing and Urban Development (HUD). It serves as a comprehensive resource for understanding the Fiscal Year (FY) 2024 Income Limits across the United States. While official Income Limits are available in PDF and Excel formats via this link and should be used for all official purposes, this guide explains the methodology and addresses frequently asked questions.
NOTE: Please be aware that due to the Housing and Economic Recovery Act of 2008, the data presented 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, refer to the Multifamily Tax Subsidy Project Income Limits available at Multifamily Tax Subsidy Project Income Limits.
2024 Key Income Documents
Effective April 01, 2024.
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
Effective June 01, 2024.
Data for Emergency Solutions Grant (ESG) – Tables for HUD 30% Income Limits. These are 30% Income Limits, calculated with high and low housing cost adjustments, state non-metropolitan minimum but without the increases for poverty guidelines in the Section 8 Extremely Low Family Incomes.
2024 Income Data
Effective April 01, 2024
Effective June 01, 2024
Median Family Incomes
Frequently Asked Questions About Median Family Income
Q1. How does HUD determine median family income figures?
To calculate the FY 2024 median family income, HUD primarily relies on data from the 2022 Census Bureau American Community Survey (ACS) for most areas across the nation. HUD thoroughly assesses the statistical validity of these ACS estimates. For an ACS estimate to be deemed statistically valid, it must meet two criteria: its margin of error must be less than half the size of the estimate, and it must be based on a minimum of 100 observations.
In regions where a statistically valid survey estimate is available using the 2022 one-year ACS data, this data is utilized. If not, statistically valid 2022 five-year data is employed. In cases where statistically valid five-year data is also unavailable, HUD averages income estimates from the preceding three years of ACS data (2022, 2021, and 2020) that meet a minimal statistical validity threshold. Minimal statistical validity is defined as ACS estimates where the margin of error is less than half the size of the estimate. This averaged data, based on minimally statistically valid 5-year data, is then adjusted to 2022 dollars using the national change in the Consumer Price Index (CPI) between the data’s ACS year and 2022. Finally, for all locations in the U.S., including Puerto Rico, these estimates (derived from either one-year or five-year data) are inflated from 2022 to Fiscal Year 2024 using the Consumer Price Index forecast provided by the Congressional Budget Office.
For a more in-depth understanding of how ACS data is used in HUD’s median family income calculations, please consult our FY 2024 Median Family Income methodology document, accessible at https://www.huduser.gov/portal/datasets/il.html#2024_data.
Comprehensive documentation of all calculations for Median Family Incomes is also available in the FY 2024 Median Family Income and the FY 2024 Income Limits Documentation System. These systems can be accessed at https://www.huduser.gov/portal/datasets/il.html#2024_query.
Q2. What differentiates HUD’s Median Family Income (MFI) from Area Median Income (AMI)?
HUD annually estimates Median Family Income (MFI) for every metropolitan area and non-metropolitan county. The definitions of metropolitan areas are consistent with those used by HUD for Fair Market Rents, except where statutory requirements dictate a different configuration. HUD’s Income Limits are calculated based on an area’s Median Family Income (MFI). The foundation for HUD’s median family incomes is the American Community Survey, specifically table B19113 – MEDIAN FAMILY INCOME IN THE PAST 12 MONTHS.
The term Area Median Income (AMI) is more commonly used within the affordable housing sector. When used without qualification, Area Median Income (AMI) is synonymous with HUD’s MFI. However, when AMI is qualified—typically expressed as percentages of AMI, or AMI adjusted for family size—it refers to HUD’s income limits. These income limits are derived as percentages of median incomes and incorporate adjustments for families of varying sizes.
Understanding Income Limits
Q3. What are the limitations on annual changes to income limits for FY 2024?
Since FY 2010, HUD has implemented caps on annual changes to income limits. Decreases in low- and very low-income limits are capped at five percent, while annual increases are limited to the greater of five percent or twice the change in the national median family income. For 2024 and subsequent years, HUD has refined this methodology, specifying that the cap should be measured using the annual change in the unadjusted national median family income, subject to an absolute cap of 10 percent. This updated methodology was initially announced on January 10, 2024, in a Federal Register Notice. For 2024, the annual change is calculated using ACS data from 2021 to 2022. Twice this change is approximately 14.8 percent, which exceeds the ten percent absolute cap. Consequently, for FY 2024, the income limits “cap” is set at 10 percent.
Q4. Is HUD increasing rents for low-income tenants?
The impact of changes in income limits varies across different programs. Many tenants in federally supported housing will experience no direct impact because their rents are directly linked to their incomes. However, for programs like Low Income Housing Tax Credits, properties have maximum allowable rents determined by the income limits published by HUD. It is important to note that the federal government does not control how individual LIHTC landlords set rents within these prescribed ranges.
HUD has neither mandated nor suggested rent increases. To the extent that property owners choose to increase rents, these increases should be minimal, implemented gradually over time, and only to the extent necessary to maintain the property’s financial stability.
Q5. Why might the income limits for my area not reflect recent economic changes?
While HUD utilizes the most current data available on local area incomes, there is inherent lag between data collection and its availability for use. For instance, FY 2024 Income Limits are calculated using 2017-2021 5-year American Community Survey (ACS) data, and one-year 2021 data where feasible. This two-year lag means that more recent trends in median family income levels are not immediately reflected.
Q6. Why might the very low-income limit not be exactly 50% of the median family income, or the low-income limit not be exactly 80%?
There are several exceptions to the straightforward arithmetic calculation of income limits. These include adjustments for areas with high housing costs relative to income, the 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. It is also important to note that Tables 1 and 2 indicate that most nonmetropolitan area income limits are based on state nonmetropolitan area medians.
For specific details on adjustments applied to a particular area, please refer to the FY 2024 Income Limits Documentation System, accessible at https://www.huduser.gov/portal/datasets/il.html#2024_query. After selecting the area in question, a summary of the area’s median income, Very Low-Income, Extremely Low-Income, and Low-Income Limits will be displayed. Detailed calculations can be accessed via the relevant links.
Q7. Why are Extremely Low-Income Limits sometimes the same as Very Low-Income Limits?
The Quality Housing and Work Responsibility Act of 1998 introduced a new income limit standard based on 30 percent of median family income (extremely low-income limits), adjusted for family size and for areas with unusually high or low family income. A statutory clarification in 1999 linked these income limits to the Section 8 very low-income limits.
The Consolidated Appropriations Act, 2014 further refined these limits as extremely low family income limits, ensuring they would not fall below the poverty guidelines established for each family size. Specifically, extremely low-income families are defined as very low-income families whose incomes are the greater of the Poverty Guidelines published by the Department of Health and Human Services or the 30 percent income limits calculated by HUD. This adjustment excludes Puerto Rico and other territories, which have separate poverty guidelines for Alaska and Hawaii, while the remaining 48 states and the District of Columbia use the same guidelines.
Extremely low-income limits are initially calculated as 30/50ths (60 percent) of the Section 8 very low-income limits. These are then compared to the applicable poverty guideline. If the poverty guideline is higher, that value is selected. If the poverty guideline exceeds the very low-income limit for a given family size, the extremely low-income limit is capped at the very low-income limit, as the definition of extremely low-income limits restricts them to very low-income levels.
Furthermore, starting in FY 2023, HUD set the extremely low-income limit at the level of the very low-income limit for Puerto Rico to increase the number of households eligible for targeted assistance within HUD programs that utilize extremely low-income limits for targeting.
Q8. Why might I encounter issues accessing the FY 2024 Income Limits Documentation System using old bookmarks or web search results?
The Income Limits Documentation System calculates median family incomes and income limits for each area, requiring specific parameters for accurate calculations. To ensure proper access, please use this direct link to the FY 2024 Income Limits Documentation System: https://www.huduser.gov/portal/datasets/il.html#2024_query.
Area Definitions Explained
Q9. Why do area definitions for median incomes and income limits change?
HUD generally adheres to the Office of Management and Budget (OMB) definitions of metropolitan areas, with some exceptions. In 2006, when HUD implemented widespread area definition changes based on the 2000 Decennial Census, exceptions were made if Fair Market Rent (FMR) or MFI changes for new areas exceeded five percent. This led to the creation of exception subareas known as HUD Metro FMR Areas (HMFA), which are still in use.
The FY 2024 MFIs and income limits are based on metropolitan area definitions defined by OMB using commuting patterns from the Census, updated through 2018. While HMFA subareas are maintained, the five percent FMR or median income test is no longer applied. All counties added to metropolitan areas become HMFAs with rents and incomes based on their county-level data, where available. The Area Definitions report, available at https://www.huduser.gov/portal/datasets/il.html#2024_data, provides details on the disposition of all counties.
Q10. What is the relationship between Fair Market Rent areas and Income Limit areas?
Fair Market Rent (FMR) areas and Income Limit areas are virtually identical, with minor exceptions. HUD utilizes FMR areas in income limit calculations because FMRs are necessary for determining certain income limit adjustments, specifically high and low housing cost adjustments. Furthermore, the two sets of area definitions share a linked statutory history. The primary exception to this similarity is Rockland County, NY, where income limits are calculated by statute, but separate FMRs are not.
Q11. What does the acronym “HMFA” stand for?
HMFA stands for HUD Metro FMR Area. This designation indicates that only a portion of the OMB-defined metropolitan statistical area (MSA) is included in the area to which income limits or FMRs apply. OMB requires HUD to modify the names of metropolitan geographic entities derived from MSAs when the geography differs from that established by OMB.
Multifamily Tax Subsidy Projects (MTSPs)
Q12. What is the national non-metro median used for rural LIHTC rent floors?
Section 3004 of the Housing and Economic Recovery Act (HERA) mandates that projects for residential rental property in rural areas (as defined in section 520 of the Housing Act of 1949) use the maximum of the area median gross income or the national non-metropolitan median income. The current year non-metropolitan median income and the 1-8 person 50-percent income limits based on this non-metropolitan median income are listed in the table 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 (MTSPs)?
Multifamily Tax Subsidy Projects (MTSPs), a HUD term, encompass all Low-Income Housing Tax Credit projects under Section 42 of the Internal Revenue Code and multifamily projects funded by tax-exempt bonds under Section 142 (which often also benefit from LIHTC). These projects may have specific income limits established by statute, which HUD publishes separately. Developers or residents of MTSPs should refer to https://www.huduser.gov/portal/datasets/mtsp.html to determine the applicable income limits.
Q14. How are 60 percent income limits calculated?
For the Low-Income Housing Tax Credit program, users should consult the FY 2024 Multifamily Tax Subsidy Project income limits at https://www.huduser.gov/portal/datasets/mtsp.html. The calculation formula for these income limits involves taking 120 percent of the Very Low-Income Limit. It is crucial not to calculate income limit percentages based on a direct arithmetic relationship with the median family income due to the numerous exceptions applied in income limit computations.
Q15. How are maximum rents for Low-Income Housing Tax Credit projects derived from very low-income limits?
For official maximum rental rate determinations, please consult the state housing financing agency overseeing the tax credit project in question. A directory of state housing finance agencies is available at https://lihtc.huduser.gov/agency_list.htm. The Low-Income Housing Tax Credit program is administered by the U.S. Treasury Department, and HUD does not have official authority over setting maximum rental rates. The following table is provided for informational purposes only.
The imputed income limitation (defined in 26 U.S.C. Sec. 42(g)(2)) is 60 percent of the median income. Rents cannot exceed 30 percent of this imputed income limitation under 26 U.S.C. Sec. 42(g)(2). Unit rents by bedroom count are derived from Very Low-Income Limits (VLILs) for different household sizes, as shown in the table below:
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 are set by assuming an additional 1.5 persons per bedroom. 1. Prior 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.
FAQs on FY24 Income Limit Cap-on-Cap
What are Income Limits?
Each year, HUD releases annual income limits, primarily used to determine income eligibility for HUD housing assistance programs. These limits are based on data from the American Community Survey and other sources. The income limit for federal affordable housing programs represents the maximum income a household can earn to qualify for or be targeted for assistance.
What are the key changes to the income limit methodology in 2024?
The primary methodological change for 2024 is a modification to the cap on annual income limit increases for individual Fair Market Rent (FMR) areas (typically metropolitan areas and non-metropolitan counties).
- Existing cap: Since 2009, HUD has capped year-over-year income limit increases at the higher of five percent or twice the percentage change in national median family income. The history of annual caps since this policy was introduced is detailed below:
| 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% |
HUD also consulted with the Treasury Department, which administers the LIHTC incentive, to refine the income limits methodology as applied to this incentive.
Why is HUD implementing this “cap-on-cap” change?
This change is driven by three main reasons:
- Tenant protection: Income limits are used by landlords in programs like HOME and LIHTC to set rents. This change is designed to prevent single-year rent increases exceeding 10 percent for affordable housing properties benefiting from these federal programs. By limiting income limit increases, HUD aims to reduce the burden on low-income households who might otherwise face substantial single-year rent hikes due to increased income limits.
- Statistical error mitigation: Data used to determine income limits in some FMR areas might have small sample sizes. Statistical errors could lead to estimated local median income changes that are larger than actual changes. If an increase is genuine, it is likely to be reflected in subsequent year’s data, resulting in a more gradual income estimate increase over two years. Sustained annual income growth exceeding 10 percent is uncommon, so in areas with a cap and real income growth, HUD’s income limits are expected to adjust in years with slower income growth. If an increase is due to statistical error, this cap prevents unnecessary increases in income limits and potential sharp rent increases.
- Stability and predictability: By adopting this methodological change, HUD seeks to enhance the stability and predictability of future maximum income limit increases and the data used for their determination. Feedback from stakeholders indicated that this predictability would aid in the financial planning of current and future affordable housing projects.
How many areas are affected by the cap in 2024?
In FY 2024, the 10 percent cap on allowed increases is expected to apply to 21 percent of FMR areas.
Does the “cap-on-cap” jeopardize the ability of LIHTC property owners to maintain their properties due to reduced rent revenue?
No, the new “cap-on-cap” is not expected to negatively impact LIHTC owners’ ability to operate and maintain their properties.
Current Treasury rules do not require LIHTC owners to reduce rents when area incomes decrease. Similarly, they are not obligated to raise rents when income limits increase, though they are permitted to do so. HUD acknowledges that landlords face rising costs related to labor, materials, and insurance. HUD’s Operating Cost Adjustment Factors account for year-over-year changes in these costs for HUD-assisted housing. HUD estimates of combined increases in labor, material, and insurance costs for 2023 and 2024, reflecting the inflationary period of 2022, did not exceed 10 percent in any state.
Furthermore, financial underwriting for LIHTC properties typically does not assume annual rent growth exceeding 10 percent. Underwriting criteria are generally more conservative, assuming annual rent growth in the range of 2 to 3 percent. While recognizing the financial pressures on property owners due to recent increases in development and operating costs, the 10 percent “cap-on-cap” appropriately balances these economic pressures with the goals of mitigating statistical error and protecting low-income residents from unsustainable rent increases.
Additionally, given the rarity of multiple years of annual income growth surpassing 10 percent, properties in jurisdictions with newly capped income limit increases could phase in rent increases over several years instead of implementing a large increase in a single year. HUD’s income limits are projected to “catch up” in years with slower income growth, allowing owners to adjust rents as needed to cover operational costs.
Will the “cap on cap” discourage developers from pursuing LIHTC credits and building new housing?
No, the new “cap-on-cap” is not anticipated to reduce the national supply of new LIHTC properties. HUD has had income limit caps in place since 2009, and there has been no evidence suggesting that these caps, even those significantly below 10 percent, have limited supply nationally. Demand for LIHTC credits significantly outstrips the current supply, suggesting that the overall supply of LIHTC properties will likely remain unaffected by a cap on single-year rent increases in a limited number of areas.
Comments received by HUD in response to the Notice announcing the methodology change indicated that new developments are most affected by the cap, as developers could build more units if permitted to charge higher rents.
However, HUD emphasizes that the cap on income limit increases is just one factor in the financing and operation of LIHTC properties. Future income levels are often uncertain and may result in lower income limits than initially projected, irrespective of the cap. Developers of LIHTC-financed properties typically do not project annual rent growth exceeding 10 percent; their financial underwriting is typically more conservative, assuming rent growth of 2 to 3 percent annually.
Moreover, properties in jurisdictions with newly capped income limit increases can phase in rent increases over multiple years, rather than all at once. At most, the capped increase on income limits will moderate exceptionally high rent growth in a limited number of areas for a year or two. A 10 percent cap is exceptionally high compared to historical averages, suggesting that income limits calculated with a 10% cap in one year will “catch up” in subsequent years. For example, over 65% of all Income Limit areas under the cap in FY23 are expected to either become uncapped in FY24 or receive the full 10% capped increase, exceeding their local AMFI increase.
This cap-on-cap is considered a reasonable limitation. As previously noted, a cap has been in effect for fifteen years, often at levels below 10 percent, and demand for credits has consistently exceeded national supply. This policy change does not affect developers who choose to build market-rate housing without LIHTC subsidies.
Will the “cap on cap” cause individuals with low but rising incomes to become ineligible for federal housing assistance?
This may affect a small number of potentially eligible households. A significant portion of those needing housing assistance are on fixed incomes. Generally, a 10 percent cap on year-over-year increases is greater than any likely income increase for households with fixed income cost of living adjustments (COLA). The largest Social Security COLA adjustment in recent years was 8.7 percent in 2022. Only in 1980 and 1981 did it exceed 10 percent.
- Prior to FY 2022, the change in national median family income used year-over-year changes from the American Community Survey (ACS) adjusted for inflation. From FY 2022 onwards, the year-to-year change uses only ACS data.
- Since 2009, HUD has set a 5% “floor” on the “cap”. Without this floor, the cap in years with slower income growth would have been significantly lower than 5%.
- In areas where the very low-income limit exceeds the statutory target of 50% of median family income due to adjustments like the high housing cost adjustment and state non-metropolitan minimum, the 10 percent year-to-year cap on increases also applies. For FY 2024, over 90% of the U.S. population resides in areas where the 4-person Very Low-Income Limit equals or exceeds 50% of the area median family income (82% of all areas).
