Affordable housing finance
Income limits
Household income ceilings — AMI percentages adjusted for household size — that decide who may occupy a restricted unit, counted under HUD's Part 5 rules.
Definition
Income limits are the qualifying ceilings for restricted units: a percentage of AMI (30, 50, 60, 80 — or an average-income band), adjusted by household size and published annually by HUD, with LIHTC deals using the MTSP series. Whether a household is under the limit depends on how income is counted, and there the governing text is HUD's 24 C.F.R. Part 5 "annual income" rules — the Section 8 definition IRC § 42 compliance borrows: wages, asset income, exclusions and verification standards. Households certify at move-in; LIHTC units then live under recertification rules and the available-unit rule at 140% of the limit.
Why it matters in an underwrite
Qualification errors are the classic audit finding: an over-income household at move-in makes the unit non-qualifying — lost credits and, inside the compliance period, recapture — and no later cure rewrites a bad initial certification. Part 5's income and asset rules changed under HOTMA, so stale verification practices are a live risk; 100% low-income projects get streamlined annual recertification relief, but the initial certification always carries the weight.
Sources & related guides
See also
See the term in the law itself
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Last reviewed 2026-07-29. General information, not legal advice.