Income Limits Rise for FY 2021

On April 1, HUD issued the fiscal year 2021 income limits that determine eligibility for various HUD-assisted housing programs including the Public Housing, Section 8 Project-Based, Section 8 Housing Choice Voucher, Section 202 Housing for the Elderly, and Section 811 Housing for Persons with Disabilities programs. The income limits became effective immediately and can be found at www.huduser.gov/portal/datasets/il.html.

Eligibility for HUD programs is based on three income levels—extremely low income (less than 30 percent of the median family income), very low (less than 50 percent of the median family income), and low (less than 80 percent of the median family income). Those income limits are then adjusted according to family size and in areas with unusually high or low incomes relative to housing costs. From there, the limits are then used to determine eligibility for specific HUD programs.

How Income Limits Are Calculated

The limits are calculated using historical data from the 2018 American Community Survey. HUD develops annual income limits based on Median Family Income estimates and Fair Market Rent area definitions. HUD used the Consumer Price Index (CPI) forecast published by the Congressional Budget Office (CBO) in February 2021 to bring the American Community Survey data forward from mid-2018 to the mid-point of the fiscal year, April 2021.

With the most recent income limits, HUD found the national median family income for the United States for FY 2021 is $79,900, an increase of almost 2 percent over the national median family income in FY 2020 of $78,500.

Use New Income Limits for New Certifications

All new certifications effective April 1 or later will include the new income limits. Managers should remember that income limits are considered only at move-in and, in very limited cases, at the initial certification [HUD Handbook 4350.3, par. 3-4]. Income limit changes don’t affect current residents’ eligibility for the HUD Multifamily Housing programs (Section 8, PRAC, etc.) when that resident is already receiving subsidy/housing assistance.

If you’ve already extended a unit offer and your new resident’s income exceeds the new income limit, you can still honor that move-in. According to HUD’s RHIIP ListServ #293, if a unit becomes available and an applicant is selected from the waiting list, is processed for eligibility, and meets all eligibility requirements at the time of processing, the applicant is eligible to move into the unit even if new income limits have been published. If this situation applies, be sure to document the household file appropriately.