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New HUD Extremely-Low Income Limits Are Posted

The definition of Extremely-Low Income (ELI) has changed for the Section 8 program.  Section 8 property managers must make sure that the new ELI limits are entered in site software. The following data and analysis are used with permission from Ross Business Development.

Extremely-Low Income families are now defined as very-low income families whose incomes do not exceed the higher of:

  • The Federal Poverty Level; or
  • 30 percent of Area Median Income.

The Department of Health and Human Services (HHS) provides three charts showing the poverty level in the United States; one for the 48 contiguous states, one for Alaska and one for Hawaii. 

You can view the 2014 Poverty Guidelines on the HHS website

For the 48 contiguous states, the Poverty Level is defined as follows:

1 member = $11,670.00

2 members = $15,730.00

3 members = $19,790.00

4 members = $23,850.00

5 members = $27,910.00

6 members = $31,970.00

7 members = $36,030.00

8 members = $40,090.00

For example - using HUD’s new definition - for the 48 contiguous states, ELI for a one member household is the greater of:

  • $11,670.00; or
  • 30 percent of Area Median Income.

This change does not affect eligibility of existing residents.  However, this change does affect ELI Income Targeting for multifamily project-based Section 8 programs.

To comply with Income Targeting requirements, owner/agents of Section 8 properties must ensure that no less than 40 percent of all new assistance (MI or IC) provided in a property’s fiscal year is to residents who meet the definition of an extremely-low income family.  These requirements are described in HH 4350.3 Revision 1, Change 4, Paragraph 4-25. 

As of July 1, 2014, compliance with the targeting requirements must take into account the new definition of ELI. An owner/agent shall meet its targeting requirements through a combination of ELI admissions prior to the effective date (using the old definition) and ELI admissions after the effective date (using the new statutory definition).

HUD’s Office of Policy Development and Research has calculated the new income limits for extremely low-income families, taking the previous sentence into account, and has made the new area income limits available online here.

Section 8 property managers must either enter the new ELI limits POSTED IN THE HUD USER DATA SETS in their software or ensure that the software vendor has entered the new income limits.

Mary Ross, president of Ross Business Development, posted the following question and answers about the new ELI limits:

We have received a number of questions regarding the new extremely-low income definition and I wanted to see if I could simplify things just a little bit.  Below are some frequently asked questions and my responses.

Question:  Where can we get the HUD documentation explaining the new definition for extremely low income?

Answer:  See page 10 of the briefing on the HUDUser website.

Question:  Do I use the poverty level defined by HHS when I enter the extremely-low income limits in my software?

Answer:  No.  That will not always be the correct number. 

The best way to ensure compliance is to use the extremely-low income limits for your area which are posted in the Income Limits Datasets on the HUDUser website.  It is not a good idea to try to figure out these numbers yourself.  PD&R has done the work for you.  Click here.

Question:  In some cases the extremely-low income limit on the HUDUser website is equal to the very-low income limit.  Is this correct?

Answer:  By definition, the extremely-low income limit cannot exceed the very-low income limit.  Specifically, extremely low income families are defined to be very low-income families whose incomes are the greater of the Poverty Guidelines as published and periodically updated by the Department of Health and Human Services or the 30 percent income limits calculated by HUD.

Puerto Rico and other territories are specifically excluded from this adjustment.

There are separate poverty guidelines for Alaska and Hawaii.

The remaining 48 states and the District of Columbia use the same poverty guidelines.  These are NOT always the same as the extremely low income limits. 

The extremely low income limits are first calculated as 30/50ths (60 percent) of the Section 8 very low-income limits. They are then compared to the appropriate poverty guideline and if the poverty guideline is higher, that value is chosen.

If the poverty guideline is above the very low income limit at that family size, the extremely low income limit is set at the very low income limit because the definition of extremely low income limits caps them at the very-low income levels.

Question:  Do I have to enter the new extremely-low income limits in my software?

Answer:  That depends on your vendor.  If your software vendor enters these values for you, then no, you do not need to enter them yourself.  However, most software vendors do not enter income limit values. 

If you are the person responsible for ensuring that the income limits are entered correctly, the best thing to do is to double check the income limits entered in your software to make sure they are equal to the income limits on the HUDUser website.

If you do not know how to view or change income limits in your software, contact your software vendor’s customer support division.

Question:  Can I wait until the end of the year to apply these new income limits?

Answer:  No, like previous income limit postings, you must implement these new income limits based on HUD’s deadline which was July 1, 2014.

Question:  Does this have any effect on the eligibility of current residents or applicants?

Answer:  This change does not affect existing residents. 

This change does not have a negative effect for applicants.  Section 8 property managers must ensure that at least 40 percent of all new move-ins/initial certifications are for families that meet the extremely-low income limit.  This is measured each fiscal year.  This is called Income Targeting and must be described in the Section 8 Tenant Selection Plan.

Question:  Does Income Targeting apply to other multi-family programs such as the PAC or PRAC program?

Answer:  Income Targeting is a Section 8 requirement.  This applies to all of the Section 8 programs, the 202/8 program and layered properties such as the 515/8 properties.  Income Targeting does not apply to the PAC or PRAC program.

Contact: Ken Harris, kharris@leadingageny.org, 518-867-8835