HUD Issues Income Limits for Fiscal Year 2023
The average increase across all areas was 5.45 percent.
On May 15, HUD issued the fiscal year 2023 income limits that determine eligibility for various HUD-assisted housing programs, including the Public Housing, Section 8 Project-Based, Section 8 Housing Choice Voucher, Section 202 Housing for the Elderly, and Section 811 Housing for Persons with Disabilities programs. The income limits became effective immediately and can be found at https://www.huduser.gov/portal/datasets/il.html.
According to the data, income limits are trending upwards. Just 54 areas had income limits that were lower in 2022, and 98 percent of areas had an increase in income limits. However, for the second year in a row, the increase was limited in the majority of areas due to HUD’s cap on income limit increases. This year, the cap on income limits is 5.92 percent. And the average increase across all areas was 5.45 percent.
Eligibility for HUD programs is based on three income levels—extremely low income (less than 30 percent of the median family income), very low (less than 50 percent of the median family income), and low (less than 80 percent of the median family income). Those income limits are then adjusted according to family size and in areas with unusually high or low incomes relative to housing costs. From there, the limits are then used to determine eligibility for specific HUD programs. If you’ve found that the income limits in your area have increased, check any files denied over the past few months to see if any slightly over-income households may qualify under the new limits.
How Income Limits Are Calculated
Increasing income limits will be helpful to families who are receiving pay increases, whether related to minimum wage increases across the country or other income adjustments. As income limits increase, more people will be able to qualify for affordable housing. And more people qualifying will increase the demand for affordable housing, which is beneficial to property owners, but puts even more strain on those looking for affordable housing.
When talking about HUD income limits, we are actually talking about two income parameters. One of them is HUD’s estimate of median family income, and the other involves the income limits derived from that estimate. HUD calculates a median family income for each metropolitan area and each nonmetropolitan county throughout the country. HUD uses American Community Survey data as the basis for that calculation. For FY 2023 median incomes, HUD used 2021 American Community Survey (ACS) median family incomes. HUD would have ordinarily used 2020 ACS data for FY 2023; however, the Census Bureau didn’t release standard one-year estimates from the 2020 ACS due to the impact of the COVID-19 pandemic on data collection. For all places in the U.S. including Puerto Rico, the estimates are then inflated from 2021 to the current fiscal year using the Consumer Price Index forecast from the Congressional Budget Office.
Use New Income Limits for New Certifications
All new certifications effective May 15 or later will include the new income limits. Managers should remember that income limits are considered only at move-in and, in very limited cases, at the initial certification [HUD Handbook 4350.3, par. 3-4]. Income limit changes don’t affect current residents’ eligibility for the HUD Multifamily Housing programs (Section 8, PRAC, etc.) when that resident is already receiving subsidy/housing assistance.
If you’ve already extended a unit offer and your new resident’s income exceeds the new income limit, you can still honor that move-in. According to HUD’s RHIIP ListServ #293, if a unit becomes available and an applicant is selected from the waiting list, is processed for eligibility, and meets all eligibility requirements at the time of processing, the applicant is eligible to move into the unit even if new income limits have been published. If this situation applies, be sure to document the household file appropriately.