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2015 State Income Limits Briefing Materials <br />California Code of Regulations, Title 25, § 6932 <br />apply exceptions to areas with unusually high or low family income, uneven housing -cost- <br />to- income relationships or historical exceptions. The following reflect HUD's explanations <br />of adjustment increases and decreases contained in HUD's FY 2015 Income Limits <br />Briefing Material: <br />Adjustment Increases: <br />HUD applies an increase, if the four - person very low- income limit would otherwise be <br />less than the amount at which 35 percent (35 %) of it equals 85 percent (85 %) of the <br />annualized two- bedroom Section 8 FMR (or 401 percentile rent in 50th percentile FMR <br />areas), The purpose is to increase the income limit for areas where rental housing costs <br />are unusually high in relation to the median income. <br />HUD applies an increase to the four person income limit if it is less than the <br />State non - metropolitan median family income level. In addition, the four - person income <br />limit is also increased, if it is less than 95 percent of last year's very low income limit. HUD <br />restricts adjustments so income limits do not vary more than five percent (5 %) of the <br />previous year's very low- income figure. Very low- income limits are used as the base to <br />calculate extremely -low and low- income limits. <br />Adjustment Decreases: <br />HUD applies a decrease to the greater of 80 percent of the U.S. median family level (MFI), <br />or the amount at which 30 percent of a four - person family's income equals 100 percent <br />of the two- bedroom FMR (or 401h percentile rent in 50th percentile FMR areas). The <br />purpose is to decrease the income limit for areas of high median family income. The <br />four - person income limit is reduced to the greater of 105 percent of last year's limit or <br />twice the change in the national MFI estimate if that amount would be larger than five <br />percent (5 %). <br />HUD restricts adjustment increases and decreases to not vary more than five percent (5 %) <br />of the previous year's very low- income figure. Adjusted very low- income limits are used as <br />the base to calculate extremely -low and low- income limits. <br />Low - Income <br />In general, maximum income for low- income households reflects 80 percent (80 %) of <br />the MFI level. Most low- income limits represent the higher level of: (1) 80 percent of <br />MFI or (2) 80 percent of State non - metropolitan median family income. However, due <br />to adjustments that HUD sometimes makes, strictly calculating low- income limits as <br />80 percent of MFI could produce unintended anomalies inconsistent with statutory intent. <br />HUD's briefing materials specify that, with some exceptions, the low- income limit reflects <br />160 percent of the very low- income limit. HUD may apply exceptions to areas with <br />unusually high or low housing- costs -to- income relationships. An example of the result <br />from HUD applying an exception to an area could be an increase to the low- income limit <br />without an increase to the very low- income limit. In sum, an "80 %" limit cannot be <br />assumed to equal 80 percent of the AMI or 4- person median income limit nor 160 percent <br />of the very low- income limit due to adjustments HUD may make. <br />Page 3 of 5 <br />55A -53 <br />