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HUD Publishes 2020 Income Limits

On March 31, 2020, HUD published the income limits for HUD programs and the MTSP limits for the Low-income Housing Tax Credit and Tax-Exempt programs. These new income limits are effective as of April 1, 2020.

These new HUD Income Limits apply to all HUD-assisted housing programs. To access the new income limits, you can use the links below:

New MTSP Income Limits

  • Low-Income Housing Tax Credit & Tax-Exempt Bonds – Income Limits can be accessed by clicking here 

Note: HUD has not yet published the Income or Rent limits for the HOME Investment Partnership Program.

What you need to know when selecting your income limit

For Section 8 Properties:

The income limit category to be used for  Project-Based Section 8 assisted properties depends on the date that the HAP agreement was executed.

  • For projects with a HAP contract effective prior to October 1, 1981, the highest income limit applicable to the project is the Low (80%) Income Limit.
  • For projects with a HAP contract effective after to October 1, 1981, the highest income limit applicable to the project is the Very-Low (50%) Income Limit.
  • For Income Limit information for other HUD MFH Programs, refer to HUD 4350.3 Figures 3-2 and 3-3.

For LIHTC Properties:

Several income limit rules apply to the LIHTC Program. Before selecting the income limits and rent limits for a LIHTC project, the following data is needed.

  • Minimum Set-Aside Election (20/50, 40/60, AI)
  • Project County
  • The Placed-In-Service Date
  • The owner’s election to item 8(b) on the IRS form 8609 (multiple building election)
  • Rural Designation of Project
HERA Special Limits

In order to use the HERA Special Limits, the project would need to have been placed in service prior to 01/01/2009, and the project is located in a county that HUD states the HERA special limits apply to.

Limits Held Harmless

In some counties, the income limits may decrease from year to year. A LIHTC project may use the prior year’s higher limit if the project is placed in service prior to publication of the new lower limits.

National Non-Metro ( Rural) Income Limits

A project may use the National Non-Metro Income limits if the project is defined as being in a rural area by USDA, and the project is NOT financed with tax-exempt bonds.

Projects with Multiple Buildings

As previously discussed, the placed-in-service date is a key date when selecting income limits, especially as it relates to income limits being held harmless.  As each building (BIN) in a project has, it’s own placed-in-service date, the owner’s election of whether buildings will or will not be treated as part of a multiple building project can affect the application of income limits at the project.

If the owner elected to treat the building as part of a multiple-building-project, by checking yes to item 8(b) on the IRS Form 8609. Then, the project’s placed-in-service date is the date the first building in the project placed-in-service.

If the owner elected to NOT treat the building as part of a multiple-building-project, by checking no to item 8(b) on the IRS Form 8609. Then, each building (BIN) is considered a separate project and the income limit applicable is based on the date that each building’s placed-in-service date.

Conquering Income and Rent Limits for Blended LIHTC Projects – Webinar 

Please join Amanda Lee Gross for a 90-minute webinar on 4/28. This webinar is on income and rent limits for projects with layered funding. Amanda’s webinar will help equip housing professionals with the knowledge needed to ensure that the correct income limits and rent limits are being used when a property has more than one funding program.

To register for this webinar, view our webinar and pre-recorded on-demand webinar page.

 

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