HUD Releases FY 2009 Income Limits for LIHTC, Bond Projects

By &
2 min read

Tax Credit Advisor, April 2009: The U.S. Department of Housing and Urban Development (HUD) has issued new income limits for federal Fiscal Year 2009, to be used starting 3/19/09 to determine tenant income and rent limits for housing units assisted by low-income housing tax credits (LIHTCs) or financed by tax-exempt multifamily housing bonds.

For the first time, HUD has published separate annual income limits for metropolitan areas and non-metropolitan counties nationwide applicable only for LIHTC and bond-financed projects. These new limits reflect adjustments necessitated by LIHTC program amendments made by the Housing and Economic Recovery Act of 2008 (HERA). These changes include integrating HUD’s “hold harmless” exception into the standard methodology for calculating estimates of area median income (AMI); providing special adjustments of income limits for HUD “hold harmless-impacted” projects; and basing income limits for projects in rural areas on the greater of the HUD AMI or the national median income for non-metro areas. Hold harmless-impacted projects are developments for which their initial tenant income and rent limits were established in FY 2007 or 2008. Their original income and rent limits were kept from falling from the limits for the previous year because of formula adjustments. However, as a result of this treatment, many of these projects would likely not have seen any future increases in income or rent limits for a year or more Ð until the HERA amendment. (For background on amendments, see Tax Credit Advisor, September 2008, p. 33.)

The new HUD income limits provide dollar ceilings for each area for one- to eight-person households at 50% of AMI and at 60% of AMI. A second set of income limits, for households at 50% and 60% of AMI, is provided for harmless-impacted projects for affected areas. The new limits also include separate maximum tax credit rents for each household size.

The minimum income limit for rural areas for a four-person household is $26,650 at 50% of AMI and $31,860 at 60% of AMI.

HUD simultaneously issued a separate set of income limits for use in federal programs other than the LIHTC and multifamily bond programs, such as Section 8.

(Income limits, documentation: http://www.huduser.org/datasets/il.html)