FY 2008 Income Limits Documentation System

FY 2008 Very Low-Income (50%) Income Limits Calculation

The 4-person Very Low-Income Limit (VLIL) is based on 50% of the median family income estimated for the Detroit-Warren-Livonia,%20MI%20HUD%20Metro%20FMR%20Area. For a discussion, of the estimated median family income please read here.

Once the median family income is estimated and a preliminary 4-person Very Low-Income Limit is calculated (as 50% of median family income) a series of comparisons required by statute are made:

  1. High Housing Cost Adjustment: The 4-Person VLIL is increased if it would otherwise be less than the amount at which 35 percent of it equals 85 percent of the annualized two-bedroom Section 8 FMR (this adjusts income limits upward for areas where rental housing costs are unusually high in relation to median income);

  2. Low Housing Cost Adjustment:The 4-Person VLIL is reduced to the greater of 80 Percent of the U.S. median family income level, or the amount at which 30 percent of it equals 100 percent of the two-bedroom FMR (this adjusts income limits downward for areas of unusually high median family incomes);

  3. State Non-Metro Median Family Income Adjustment: The 4-Person VLIL is also adjusted if it would otherwise be lower than 50% of the State Non-Metro Median Family Income; and,

Lastly, in order to minimize program management problems, HUD has devised and implemented a Hold Harmless policy. That is, income limits will be held at FY 2007 levels for areas where lower income limits would result because of the decreases in median family income estimates (or FMR estimates in areas with the high housing cost adjustment).

NOTE: Income Limits are rounded to the nearest $50 and in order to make it easier for those wishing to replicate HUD's calculations, the rounded 4-person income limit is used to calculate other family size income limits instead of the unrounded 4-person income limit.


The results of the 4-Person Very Low-Income Limit Calculation Process

Detroit-Warren-Livonia,%20MI%20HUD%20Metro%20FMR%20Area Results

The estimated FY2008 Median Family Income and preliminary 4-Person Very Low-Income Limit for Detroit-Warren-Livonia,%20MI%20HUD%20Metro%20FMR%20Area are:

Area FY 2008 Estimate of
Median Family Income
Preliminary 4-Person
Very Low-Income Limit
Detroit-Warren-Livonia,%20MI%20HUD%20Metro%20FMR%20Area $68,400 $34,200

  1. The High Housing Cost adjustment calculations follow:

    Area 2BR FMR 85% of Annualized 2BR FMR 35% of Preliminary 4P VLIL Comparison High Housing Cost Adjustment
    Detroit-Warren-Livonia,%20MI%20HUD%20Metro%20FMR%20Area $805 $8,211 $11,970 Is $11,970 < $8,211
    No
    No
    4 Person VLIL
    =
    $34,200

  2. The Low Housing Cost adjustment calculations follow:

    Area Annualized 2BR FMR 80% of US Median Income 30% of Preliminary 4P VLIL Comparisons Low Housing Cost Adjustment
    Detroit-Warren-Livonia,%20MI%20HUD%20Metro%20FMR%20Area $805 * 12
    =
    $9,660
    $49,200 $10,260 Is $10,260 > $9,660
    Yes
    Is $34,200 > $49,200
    No
    No
    4 Person VLIL
    =
    $34,200

  3. State non-metro Median Family Income Adjustment

    Area 50 Percent of State Non-Metro
    Median Family Income
    Comparison State Median Family Income Adjustment
    Detroit-Warren-Livonia,%20MI%20HUD%20Metro%20FMR%20Area $50,200 * 0.5
    =
    $25,100
    Is $34,200 < $25,100
    No
    No
    4 Person VLIL
    =
    $34,200

Once the final 4-Person income limit has been established, calculation of income limits for other family sizes is straight-forward. The 1-Person family Income Limit is 70% of the 4-Person Income Limit. The 2-Person family Income Limit is 80% of the 4-Person Income Limit, the 3-Person family Income Limit is 90% of the 4-Person Income Limit, the 5-Person Income Limit is 108% of the 4-Person Income Limit, the 6-Person Family Income Limit is 116% of the 4-Person Income Limit, the 7-Person family Income limit is 124% of the 4-Person Income Limit, and the 8-Person Family Income Limit is 132% of the 4-Person Income Limit. For family sizes larger than 8 persons, the income limit can be calculated by adding an additional eight (8) percent per person to the next lower limit. For example a 9-Person Family Income Limit is 140% (132% + 8%), and so on.

Income Limits are rounded to the nearest $50 and in order to make it easier for those wishing to replicate HUD's calculations, the rounded 4-person income limit is used to calculate other family size income limits instead of the unrounded 4-person income limit.

Although the Detroit-Warren-Livonia,%20MI%20HUD%20Metro%20FMR%20Area received No Adjustments as calculated above, the preliminary Income Limit Value of $34,200 is not the final 4-person Income Limit of $34,950. Consequently, the final 4-Person Income Limits associated with Detroit-Warren-Livonia,%20MI%20HUD%20Metro%20FMR%20Area are subject to a Hold Harmless condition as well.

FY 2008 Hold Harmless Comparison
Detroit-Warren-Livonia,%20MI%20HUD%20Metro%20FMR%20Area
Income Limit Information 1-Person 2-Person 3-Person 4-Person 5-Person 6-Person 7-Person 8-Person
FY 2008 Prelim VLIL $23,950 $27,350 $30,800 $34,200 $36,950 $39,650 $42,400 $45,150
FY 2007 Final VLIL $24,450 $27,950 $31,450 $34,950 $37,750 $40,550 $43,350 $46,150
Hold Harmless Required? Yes Yes Yes Yes Yes Yes Yes Yes
FY 2008 FINAL VLIL $24,450 $27,950 $31,450 $34,950 $37,750 $40,550 $43,350 $46,150


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