FY 2010 Income Limits Documentation System

Median Family Income Calculation Methodology

FY 2010 estimates take advantage of the 2008 American Community Survey (ACS) 3-year data published by the Bureau of the Census. While HUD's FY2010 median family income (MFI) estimates are still updates of 2000 Census data, the 2010 HUD update factors are similar to the methodology employeed to generate FY2009 update factors; similarly, FY2010 estimates use 3 year ACS data because more areas are covered by the 3 year estiamtes. In general:

HUD's FY 2010 MFI estimates make more extensive use of ACS data than previous years. All estiamtes are projected forward from 2008 to April 1, 2010, using an annual trend factor of 3.0 percent. Except for minor modifications, HUD continues to use the same area definitions used in FY2006.

Importantly, since the ACS responses where delivered between 2006 and 2008, the impact of the recession which began in 2008 on family incomes is not fully captured by these data.

The Savannah, GA MSA has published local area 3 year 2008 ACS Survey results.

The step-by-step procedures used to develop FY 2010 estimates for Savannah, GA MSA are as follows:

  1. The 2000 Census was used to estimate what are treated as mid-1999 local median family income estimates.

  2. The 2000 Census estimates are updates from mid-1999 to end-2008 using the following formula:

    (1 - 10*MoER)*
    ACS Local Median 2008

    Census Local Median 2000
    ACS State Median 2008

    Census State Median2000

    Where MoER is the "margin of error ratio." The MoER is defined as the margin of error of the 2008 ACS local MFI estimate divided by the 2008 ACS estimate of local MFI. The weight assigned to the change in local median family income from the ACS is the larger of 1 minus 10 times the MoER or zero and the weight assigned to the change in state MFI is ten times the local MoER, or one, whichever is smaller.

    NOTE:ACS estimates are based on samples drawn throughout the survey years that ask about income for the previous 12 months, thereby reflecting income over a 47 month period. All responses are then adjusted by the Bureau of the Census to "annual" values for the survey year using the average of the sum of the CPI indexes for the 12 months before the survey date over the annual CPI index for the year of the survey response. See "Income, Earnings, and Poverty from the 2005 American Community Survey", August 2005 page 2 for a discussion of inflation adjustments made by Census for the ACS. The Census Bureau further updated each response in a multi-year estimate (in this case 3-year estimates) to the final year of survey period (2008). HUD makes a further adjustment to these values by moving the "as of" date to December of the publication year, again using CPI indexes. Specifically, HUD adjusts the 2008 multi-year estimate to December 2008 using the seasonally adjusted December 2008 CPI (211.339) over the 2008 annual CPI (215.303). All 2008 ACS data are adjusted to December of 2008 in this way.

  3. Median family income estimates for April 1, 2010, are then estimated as follows:

    Step 1 median family income
    * Step 2 adjusted local update factor
    * 1.03 (3.0% annual trending) 1.25 years
    = FY 2010 Median Family Income estimate

Although HUD is continuing its use of 3-year ACS data in estimation of median family income estimates, HUD is discontinuing its use of the "hold-harmless policy" with respect to Section 8 income limits for FY 2010. For more in depth information, please review HUD's FY2010 Briefing Materials, Page 1.

The results of the Median Family Income Step by Step Process

Savannah, GA MSA Results

  1. The following are the 2000 Census Median Incomes (as of 1999) for:

    Area 2000 Census
    Median Family Income
    Savannah, GA MSA $47,325
    NOTE: Since HUD uses area definitions based on the calculation of Fair Market Rents, the 2000 Census Median shown above will not match Census publications as HUD uses special tabulations of Census data specific to HUD's area definitions.

  2. The mid-1999 to end-2008 update factor is calculated as follows:
    Area ACS Local Median2008 Confidence
    MoER Year End 2008 Update Factor Census Local Median2000 Local Factor Calculation Weight
    ACS State Median2008 Census State Median2000 State Factor Calculation Weight
    Savannah, GA MSA 58,062* 2,386 2,386 / 58,062
    (211.339 / 215.303)
    47,325 (58,062 * 0.9816) / 47,325
    56,993 / 47,325
    0.589 60,208 49,280 (60,208 * 0.9816) / 49,280
    59,099 / 49,280
    0.411 (0.589 * 1.2043) + (0.411 * 1.199)
    0.7093 + 0.4928
    *The 2008 ACS Local Median shown here was derived from a special tabulation generated for HUD specific to HUD's area definitions.

  3. The FY 2010 median family income is estimated as follows:
    Area Step 1
    2000 Census
    Area Median Family Income
    Step 2
    Adjusted Local Update Factor
    3.0% for 1.25 years
    Area MFI Estimate
    Savannah, GA MSA 47,325 1.2022 1.031.25
    (47,325 * 1.2022 * 1.03764)

  4. In keeping with HUD policy, the MFI Estimate is rounded to the nearest $100:
    Area Unrounded
    FY 2010 MFI Estimate
    FY 2010 MFI Estimate
    Savannah, GA MSA $59,035.61 $59,000

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