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2017 State Income Limits Briefing Materials California Code of Regulations, Title 25, Section 6932 79AT-TW-+T Department of Housing and Community Development (HCD), pursuant to Health & Safety Code Section 50093(c), must file updates to its State Income Limits with the Office of Administrative Law. HCD annually updates these income limits based on Federal Department of Housing and Urban Development (HUD) revisions to its Public Housing and Section 8 Housing Choice Voucher Program that HUD released on April 14, 2017. HUD annually updates its Section 8 Income Limits to reflect changes in area and family median income levels and income levels for different size households and income categories for extremely low, very low, and low-income households. HCD, pursuant to statutory provisions, makes the following additional revisions: (1) If necessary, increase a count's area median income to equal California's non -metropolitan median income, (2) adjusts area median income and household income category levels to not result in any decrease for any year after 2009 pursuant to HCD's February 2013 HH Policy. HCD's HH Policy was implemented to replace HUD's HH Policy, discontinued in 2009, to not decrease income category and area median income levels below a prior years highest level and, (3) determines income limits for California's moderate -income category. Following are brief summaries of ddferent technical methodologies used by HUD and HCD in updating income limits for dfferent household income categories. HUD Methodolo HUD uses 40th percentile rents in 50th percentile fair market rent (FMR) areas, to calculate high housing cost areas. The purpose is to prevent fluctuations in "Low -Income Housing Tax Credit Difficult Development Area" determinations that result solely from high housing cost income limit fluctuations as areas go in and out of the 50th percentile FMR program. Extremely Low-income The Extremely Low -Income limits is calculated as 60 percent of the very low-income limits and compared to the most recent update to the Federal Poverty Guidelines_ if the,poverty guidelines are higher, those values are chosen. The value is capped at the Very Low -Income level_ Very Low-income The maximum Very Low -Income limit typically reflects 50 percent of median family income (MFI). HUD's MFI figure generally equals two times HUD's 4 -person very low-income limit, except when HUD applies adjustments. HUD may adjust income limits for an area or county to account for conditions that warrant special considerations, referred to as exceptions. Low -Income In general, maximum income for low-income households reflects 80 percent of the MFI level. Most low-income limits represent the higher level of: (1) 80 percent of MFI or, (2) 80 percent of State non -metropolitan median family income. However, due to adjustments that HUD sometimes makes, strictly calculating low-income limits as Page 2 of 5 75B-46