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2015 State Income Limits Briefing Materials <br />California Code of Regulations, Title 25, § 6932 <br />Overview <br />Pursuant to Health & Safety Code (H &SC) Section 50093(c), California Department of <br />Housing and Community Development (HCD) filed 2015 State Income Limits with the <br />Office of Administrative Law. HCD updated its income limits based on Department of <br />Housing and Urban Development (HUD) updates to its Section 8 Housing Choice Voucher <br />Program that HUD released on March 6, 2015 and revised on March 10, 2015. <br />HUD annually updates Section 8 income limits to reflect changes in household income <br />category levels and median income levels applicable to extremely -low, very-low, and low - <br />income households. California law specifies that its State Income Limits must be updated <br />based on HUD updates to its Section 8 income limit levels. The Department also revises <br />its State Income Limit levels to reflect: (1) adjustments, per State law, to some HUD <br />county median income figures, and (2) adjustments to some household income category <br />and area median income levels to reflect HUD's February 2013 Hold Harmless (HH) <br />Policy. This policy was implemented to replace HUD's HH Policy, discontinued in 2009, in <br />maintaining income category and area median income levels at their highest achieved <br />levels and (3) calculation of California's moderate- income household levels based on <br />changes to county area median income levels. <br />Following are brief summaries of different methodologies used by HUD and HCD in <br />updating income limits for different household income categories. <br />HUD Methodology <br />HUD uses 40th percentile rents in 50th percentile fair market rent (FMR) areas, to <br />calculate high housing cost areas. The purpose is to prevent fluctuations in "Low - <br />Income Housing Tax Credit Difficult Development Area" determinations that result <br />solely from high housing cost income limit fluctuations as areas go in and out of the <br />50th percentile FMR program. <br />Extremely Low - Income <br />This income category comprises households with a maximum income of 30 percent (30 %) <br />of HUD's median family income (MFI). HUD calculates extremely -low income limits based <br />on very-low income limits. Extremely low- income limits reflect 60 percent of very-low <br />income limits. However, HUD sets a floor based on minimum Supplemental Security <br />Income (SSI). <br />Very Low - Income <br />The maximum very-low income limit typically reflects 50 percent (50 %) of MFI. HUD's <br />MFI figure generally equals two times HUD's 4- person very low- income limit, except when <br />HUD applies adjustments. HUD may adjust income limits for an area or county to account <br />for conditions that warrant special considerations, referred to as exceptions. HUD may <br />Page 2 of 5 <br />55A -52 <br />