On May 31, HUD released the FY11 Income Limits and estimated median family incomes (MFIs) with some significant changes to its methodology. These data are used to set income eligibility requirements for public housing, the Section 8 Housing Choice Voucher program, and the Section 202 and Section 811 housing programs. The geography of the income limits coincides with the areas used to set Fair Market Rents (FMRs).
In FY11, the estimated MFI for the U.S. is $64,200. The MFI declined in 29% of FMR Areas from 2010 to 2011.
This year HUD was able to discontinue its use of data collected during the 2000 Census in the production of MFIs. Instead, HUD incorporated the 2005-2009 5-year American Community Survey (ACS) data, released in December 2010, into their calculations. In areas where 2009 1-year ACS data is available and produces a valid MFI, HUD will use this data if it significantly different from the 5-year MFI. The estimates are then brought to the midpoint of FY11 using an annual trend factor of 3%.
HUD’s Income Limits are based on the MFIs and are then adjusted for family size and for areas with unusually high or low income-to-housing-cost relationships. Beginning last year, with the removal of the “hold harmless” policy (see Memo, 5/14/10), Income Limits can now decline from year to year, but all annual decreases are limited to 5% and all annual increases are capped at either 5% or twice the change in the national MFI, whichever is greater.
Very low income limits for four-person families are the most well-defined income limits, and form the basis of most other income limits. From FY10 to FY11, there were almost 700 FMR areas, or 27% of all FMR areas, where the 4-person very low income limit decreased. This is up from 23% of FMR areas that declined between FY09 and FY10. Among the areas that saw a decline in their very low income limit, the average decline 2.4%, also up from an average decline of only 1.0% between FY09 and FY10. However, overall, the very low income limits increased by 1.6% from FY10 to FY11.
To learn more about the FY11 MFIs and Income Limits, and to access the online documentation system that shows how these estimates are derived for specific areas, go to http://www.huduser.org/portal/datasets/il/il11/index.html.