FY 2010 Income Limits Documentation System

FY 2010 Low-Income (80%) Income Limits Calculation

In general, most four-person low-income limits are the higher of 80 percent of the area median family income or 80 percent of the State non-metropolitan median family level. Because the very low-income limits are not always based on 50 percent of median, calculating low-income limits as 80 percent of median would produce anomalies inconsistent with statutory intent (e.g., very-low income limits could be higher than low-income limits). The calculation normally used, therefore, is to set the four-person low-income limit at 1.6 (i.e. 80%/50%) times the relevant four-person very low income limit. The only exception is that the resulting income limit may not exceed the U.S. median family income level ($63,800 for FY 2010) except when justified by high housing costs. Use of very low-income limits as a starting point for calculating other income limits tied to Section (3)(b)(2) of the U.S. Housing Act of 1937 has the effect of adjusting low-income limits in areas where the very low-income limits have been adjusted because of unusually high or low housing-cost-to-income relationships.

New for FY2010, HUD has discontinued its use of the hold harmless policy that has been in place for several years. For further information, please review our Federal Register Notice, released May 12, 2010. However, in order to minimize program management problems, HUD has devised and implemented a set of maximum and minimum changes for income limits. Consequently, the FY2010 Income Limits cannot increase by more than the greater of 5 percent or twice the national average change in median family income and cannot decrease more than 5 percent. For FY2010, the national change in median family income is 0.625 percent, therefore the maximum change amount is 5 percent.


  1. The first step in establishing the Low-Income Limit is establishing the preliminary 4-person income limit. This is accomplished by multiplying the 4-Person Very Low-Income limit by 1.6 (80%/50%). The calculations are as follows:

    Area 4-Person
    Very Low-Income Limit
    Preliminary 4-Person
    Low-Income Limit
    Savannah, GA MSA $29,500 $47,200

  2. Next, a comparison is made to ensure that the preliminary 4-Person Low-Income limit is not greater than the U.S. median family income level:

    Area US Median Family Income Comparison Result
    Savannah, GA MSA $64,400 Is $47,200 > $64,400?
    No
    No Adjustment
    4 Person LIL
    =
    $47,200

  3. Next, a check is made to see if the area qualifies as a High Housing Cost Area. This is similar to the High Housing Cost adjustment made for Very Low-Income limits. An area's income limit is adjusted due to High Housing Costs if 85% of the area's annual 2 bedroom FMR is greater than 35% of the US Median Income. As we are deriving the Low-Income limit, the 85% of the annual 2-BR FMR is augmented by 1.6:

    Area 2BR FMR Annual 2BR FMR Annual 2BR FMR*
    1.6*85%
    35% of US Median Income Comparison Result
    Savannah, GA MSA $815 $9,780 $13,301 $22,540 Is $13,301 > $22,540?
    No
    No Adjustment
    4-Person LIL
    =
    $47,200

Subsequent to the comparisons above, Low-Income Limits are calculated for each person size family between 1 and 8 persons. As is done with the Very Low-Income Limits, the 1 Person Limit is calculated by multiplying the 4-Person limit by 70%, the 2 person is obtained by multiplying the 4-Person limit by 80%, the 3 person by multiplying the 4-Person by 90%, the 5 Person by multiplying the 4-Person by 108%, the 6 Person by multiplying the 4-Person limit by 116%, the 7 Person by multiplying the 4-Person limit by 124%, and the 8-person by multiplying the 4-Person limit by 132%.

Savannah, GA MSA
Income Limit 1-person 2-person 3-person 4-person 5-person 6-person 7-person 8-person
FINAL FY2010 Low-Income Limits $33,050 $37,800 $42,500 $47,200 $51,000 $54,800 $58,550 $62,350


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