It’s no surprise that current events around the world continue to affect our economy. And their impact is felt by every individual and family. So what do you need to know about HUD’s Income Limits this year? Let’s go over a few key facts.
1. Rental Rates
First, HUD has no control over how low-income housing rents are set and has not required or suggested rent increases. It’s the Multifamily Tax Subsidy Income Limits, that set maximum rental rates. This process was established by the Housing and Economic Recovery Act of 2008. The program issued a statement regarding the Low-Income Housing Tax Credit program administered by the IRS.
Properties that participate in the program base their rents on the income limits that HUD is mandated to publish. Still, HUD continues to “encourage property owners to exercise compassion with respect to tenants affected by the COVID-19 pandemic and would be surprised that an owner would be so out of step with the moment in which we are living to raise rents at this time.”
2. Fair Market Rates
Fair Market Rent (FMR) data is typically taken from recent move-ins rather than long-term tenants, as long-term tenants generally receive a lower monthly rental rate. This means that rates and rents should begin to affect changes from the Pandemic.
Generally, FMR is calculated as the 40th percentile of gross rents. This percentile is measured for regular, standard quality units in your local housing market.
3. Income Limits and Brackets
For 2022, those making less than $42,000 make up the lower-income bracket, while those making more than $126,000 make up the upper-income bracket.
It’s the Department of Housing and Urban Development that sets income limits. These limits determine eligibility for Section 8, based on Median Family Income estimates and Fair Market Rent rates. For households and families, the median income considers the total number of households and families including those with no income.
The income limit for Section 8 is the maximum amount that a household can earn in order to qualify for and receive assistance. HUD uses a household’s gross income to calculate eligibility, which is the total amount received before taxes and other deductions are removed.
If you’re not sure, you can calculate what to expect for your income limit threshold in regards to how many people are in your family. Last year HUD released their FY2021 income limits on April 1, 2021. We expect that they will continue with that trend and release the FY2022 income limits on Friday, April 1, 2022. We will be watching out and will let you know as soon as they do.
Make sure to subscribe using the form on our site and we will update you as soon as the new limits are available!
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